Business Snapchat Shares Oversubcribed, Valued At $24bn Despite Losses

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Snap, owner of the Snapchat, has priced its shares for listing on the US stock market at $17 per share.

The shares, which were more than ten times oversubscribed, will list on the New York Stock Exchange on Thursday.

The flotation values the business at $24bn, although Snap has never made a profit.

It will turn the company’s founders Evan Spiegel and Bobby Murphy into multi-billionaires.

Snapchat, a messaging app popular with teenagers, allows users to send images and messages that then vanish.

Shareholders who buy shares at the flotation will not have voting rights.

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The company’s losses widened last year, and user growth is slowing down in the face of intense competition from larger rivals such as Facebook, reports the BBC.

Despite the challenges in converting “cool” into cash, Snap’s valuation is the richest for a US tech flotation since Facebook in 2012.

At the beginning of February Snap’s formal announcement to regulators of its plans revealed that the company made sales of $404m last year, but a loss of $515m.
 

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