After Snap's IPO this week, the 26-year-old CEO and his co-founder Bobby Murphy were worth at least $5.2 billion apiece when the market closed Thursday, with Snap stock (snap) ending its first trading day at just under $24.50 per share. "70 percent of 18-24 year olds use Snapchat in the USA", said CNET's Richard Nieva.
Snapchat, which became wildly popular with young smartphone users keen to share messages that don't linger, is seen by some in the social media world as a winning bet like Facebook, and by others as a lackluster performer like Twitter.
The president of Saint Francis High School, Simon Chiu wrote in a letter to families of students saying in part, "The school's investment in Snap has matured and given us a significant boost as we continue our work towards realising the bold vision and goals". Still, for those so-called unicorn startups that command billion-dollar valuations, Olshan Frome Wolosky attorney Spencer Feldman says he would recommend that they adopt nonvoting stock in their IPOs as long as buyers were still interested.
Founded in early 2011 by three friends who first met in a Stanford University dorm, Snapchat was valued at $4.25 million when it received its first venture capital. At that price, it has a market value of about US$20 billion, based on 1.16 billion shares outstanding after the IPO.
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Stockpile, a full service brokerage that allows you to give shares of stock in the form of a gift certificate, saw incredible demand for Snap shares on Thursday. It faces intense competition from larger rivals such as Facebook's Instagram as it grapples with decelerating user growth. The parent company, Snap, reported a loss of $514 million a year ago, compared with a loss of $373 million in 2015.
What's more, Snap shares carry no voting rights, so if investors don't like the management they can't vote them out.
The maker of disappearing photo-app Snapchat, based in Venice, California, is the first technology or communications company to go public in the U.S.in 2017. Their remaining shares are worth an estimated $17 million. Snapchat makes some money from ads, and their newly released special glasses, Spectacles - though the product hasn't made much of an impact on the bottom line.