Silicon Valley high school makes $24 million from Snap IPO

An analyst downgraded Snap Inc. while another saw it a healthy correction.

The second biggest -Goldman – sold almost 50 million shares, or 24.8 percent, amounting to about $21.08 million. Analysts started picking up on that.

Pivotal has a target price of $10 per share for the stock although Wieser writes that even this lowly valuation is “stretched”. According to the news outlet, Snap’s stock allocation to NBCUniversal seemed to be the only one made to a new strategic investor at the time of its IPO.

Sell-side analysts are quite skeptical on the stock. But traders looking to get a stake in Snap Inc have plenty of tech IPO history to consider. Strong investor interest even suggests that Snap could have potentially raised its IPO a little more higher and it could have resulted in raising more than $4 billion.

Despite the early success of Snap, many are still unsure if it can truly compete with the likes of Facebook and Google – or fade away like Twitter has, despite experiencing an nearly equally impressive first of day of trading.

If there’s one lesson Silicon Valley can learn from Snap Inc.’s trading debut, it’s that investors in initial public offerings are again willing to stomach the uncertainty of betting on hopeful, young companies. They offer two different pictures of the direction Snap could take. And while revenue has grown, from $58.7m in 2015 to $404.5m in 2016, losses are up too. The company has spent a total of $1.5 billion betting on digital assets in just a year and a half, according to CNBC. “This is how Facebook insulated itself with WhatsApp, Instagram and their new in-house video features”. It jumped another 11% on Friday amid pent-up investor demand for the flashy social media service.

So how come the stock is still trading far above its $17 offering price?

Snap also revealed that its two co-founders, Evan Spiegel and Bobby Murphy, will “have control over all stockholder decisions”, something unusual for a publicly traded company. Google was actually profitable that year, posting net income of $399 million on $3.2 billion in revenue. What’s more, concerns about the business’s lack of profitability and competitive advantage over larger peers such as Facebook are influencing analysts’ opinion of the firm.

Based on the opening price on Thursday, Snap had a market cap of about $33 billion, greater than corporate giants like Macy’s and American Airlines, and about $22 billion more than Twitter, a competitor.