The company priced its initial public offering at $17 a share Wednesday, above its previously proposed range of $14 to $16 a share. Snap is the biggest U.S. tech IPO since Facebook (FB, Tech30) in 2012. In fact, Snap is now worth about three times as much as Twitter (TWTR, Tech30)'s current market cap.
Evan Spiegel and Bobby Murphy, Snap's 20-something cofounders and newly minted billionaires, rang the opening bell. The floor of the exchange featured Snap's ghost logo and its quirky smiling yellow vending machines that dispense sunglasses.
"The demand for the Snap IPO has been very, very strong," says Jeff Zell, an analyst with IPO Boutique, a research firm. There was enough investor interest for Snap to raise its IPO price more, according to Zell, but it likely wanted to see the stock pop on the first day.
Investors are flocking to buy up Snap shares even with some significant red flags.
The young company saw user growth slow to a halt in the final months of last year, according to its original IPO filing last month. The slowdown coincided with Facebook's Instagram launching a Snapchat copycat feature.
In the filing, Snap repeatedly said its user numbers and engagement "can be lumpy and unpredictable" -- or the opposite of what Wall Street typically prefers.
Snap only began making money two years ago and is still struggling to turn a profit. The company suffered losses of $515 million in 2016, up from a loss of $373 million the year before.
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