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Snapchat IPO

Snap Inc., the parent company of Snapchat, was valued at $28bn when it went public on 2 March. What’s next for its share price? Spread bet or trade CFDs on the value of its shares, or buy and sell them with our share dealing service.

All trading involves risk. Losses can exceed deposits.

How to trade the Snapchat IPO

Now Snapchat has gone public, you can take a position on whether its share price will rise or fall by placing a spread bet or trade CFDs.

If you’d prefer to invest in Snapchat shares directly, you can do so using a share dealing account, which will also enable you to add them to a stocks and shares ISA.

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Key facts

  • Snapchat IPO took place on 2 March

  • Reached an end-of-day valuation of $28bn, at around $24 a share

  • Achieved an initial offering of $3.4bn, giving a guide price of $17 a share

  • 158 million daily active users (quarter ending 31 December 2016)

  • $404.5m revenue in 2016, up from $58.7m in 2015

  • $514.6m net loss in 2016

Where will Snapchat go next?

On 2 March, Snap went public on the New York Stock Exchange. The tech giant was valued at $28 billion at the end of its first day of trading, with its share price having rocketed from a guide price of $17 to a closing price of $24.48.

Facebook's wariness of the threat posed by its Silicon Valley neighbour has proved entirely justified. With the $3.4 billion share sale alone, Snapchat co-founders Evan Spiegel and Bobby Murphy already surpassed the buyout offer Facebook CEO Mark Zuckerberg once made them. By holding out, they have achieved the largest IPO since Alibaba’s in 2014.

Announced back in early February, Snapchat’s IPO appeared ambitious, even after the photo-sharing company lowered its original valuation expectations to $22 billion. The five-year-old company’s revenue increased by 600% in 2016, but there have long been questions over a business model that anticipates substantial future operating losses and foregoes profitability. Muddying the waters further still was the choice not to sell voting shares, meaning its executive board would still keep total control of the entire company even with public funds.

Clearly this did little to deter investors. The question now is whether the optimism will pay off. In the lead-up to the flotation, analysts used Twitter and Facebook as touchstones by which to assess Snapchat. But both of these companies’ fortunes have diverged in dramatic ways since going public, making it hard to know if investor confidence will prove justified in the long term.

FAQs

When did Snapchat go public?

Snap Inc., the parent company of Snapchat, floated on the New York Stock Exchange on 2 March. It originally filed for an IPO in February 2017.

What was Snapchat's post-IPO valuation?

Snapchat’s shares price closed at $24. 48, giving it a total valuation of around $28 billion at the end of its first day of trading.

Snapchat was targeting a valuation of between $19 and $22 billion at the end of its first day of trading, though this was downgraded from the $25bn of its IPO filing. Co-founders Evan Spiegel and Bobby Murphy raised an initial $3.4 billion in the share sale.

Who runs Snapchat?

Evan Spiegel (CEO) and Bobby Murphy (CTO) are the co-founders and primary stakeholders of Snap Inc.

What is a grey market?

Before Snapchat went public, IG offered a grey market on the company’s expected valuation.

By taking a position on a grey market, you’re taking a position on a company’s potential market cap ahead of its IPO (total shares in issue x price). If you think the estimated value of the company is over- or under-priced, or if news stories surrounding the business creates additional volatility, a grey market enables you to take advantage before the shares are released publically on the stock exchange. 

How is a trade on our grey market settled?

Settlement of your trade is calculated based on the official closing price of the first day of trading, as reported by Bloomberg.

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