The company behind the popular messaging app Snapchat is expected to start trading Thursday after a better-than-expected stock offering.
Snap Inc. passed its first major test on Wall Street on Wednesday as it priced its initial public offering of 200 million shares at $17 each. That is above the expected range of $14 to $16 and values the Los Angeles company at $24 billion.
Snap’s IPO is one of the most anticipated for a technology company since Twitter’s stock market debut in 2013. Co-founders Evan Spiegel and Robert Murphy will retain controlling power over all matters at Snap; the Class A stock being sold in the IPO has no voting power. Snap is getting the ticker symbol “SNAP” on the New York Stock Exchange.
Prospects for Snap
For Snap, which started its official bid to go public last Halloween, the looming question now is whether investors are in for a trick or a treat.
Snap’s Snapchat app is best known for disappearing messages and quirky facial filters for jazzing up selfies. It’s popular with teenagers and younger millennials. While Facebook launched in the era of desktop computers and Twitter in text-based mobile, Snapchat jumped straight to photos and videos. In a sense, it’s ahead of the game.
But its user growth has slowed down in recent months.
Blame Facebook. Growth slowed to a crawl since Facebook’s Instagram cloned Snapchat’s “stories” in August. With the feature, photos and videos shared by users play in a loop for 24 hours, then disappear. The feature helped Snapchat recover from stagnant growth before, but now it’s no longer unique to Snapchat. After adding 36 million daily active users during the first half of last year, Snapchat picked up just 15 million in the second half.
The number of people downloading Instagram’s app has been accelerating during the past six months, suggesting a…