New York: Snap Inc's in-demand shares opened for trading on Thursday at $24 on the New York Stock Exchange a day after pricing at $17 per share.
The owner of the popular Snapchat messaging app raised $3.4 billion in its initial public offering, pricing 200 million shares on Wednesday night above its stated range of $14 to $16 dollars a share.
The shares last traded up 45 percent at $24.67.
Snap co-founder Evan Spiegel, who last night earned $272 million on the offering, showed up to the floor of the exchange in a suit and tie to ring the opening bell before leaving the building to watch festivities away from the spotlight he famously eschews.
The IPO has tested investor appetite for a social media app that is beloved by teenagers and people under 30 for applying bunny faces and vomiting rainbows onto selfies, but has yet to convert "cool" into cash.
Despite a nearly seven-fold increase in revenue, Los Angeles-based Snap's net loss widened 38 percent last year. It faces intense competition from larger rivals such as Facebook's Instagram as it grapples with decelerating user growth.
Snap began trading into a market with keen hunger. The book was more than 10 times oversubscribed and Snap could have priced the IPO at as much as $19 a share, but the company wanted to focus on securing mutual funds as long-term investors rather than hedge funds looking to quickly sell, a source familiar with the matter said.
Underwriters often price their IPOs below demand in order to ensure a first day spike.
Such a pop, though positive for a company's momentum, does not ensure long-term success. Share of social media company Twitter Inc surged 93 percent when it first opened on the New York Stock Exchange in 2013, but are now trading at $15.84, down nearly 40 percent from its $26 IPO price and nearly 70 percent from its opening price of $50.09.
The New York Stock Exchange carried out a trial run last week to make sure the third-biggest technology IPO ever went smoothly.
Snap's offering was well timed, with investors clamoring for fresh opportunities after 2016 marked the slowest year for tech IPOs since 2008. The broader market has also been buoyed in the months following the election of U.S. President Donald Trump, with the benchmark S&P 500 surging 10 percent since the Nov. 8 election amid optimism around the Republican administration's domestic proposals, including plans to reform taxes paid by businesses.
"The environment is terrific. Animal spirits are running through the streets here. What better time to price,” said Stephen Massocca, senior vice president at Wedbush Securities.
The launch could encourage debuts by other so-called unicorns, tech startups with private valuations of $1 billion or more.
Investors bought the shares despite them offering no voting power, an unprecedented feature for an IPO at odds with rising concerns about corporate governance from fund managers looking to gain influence over executives.
To justify its relatively high valuation and fend off concerns about slowing user growth, Snap has emphasized how important Snapchat is to its users, how long they spend on the app and the revenue potential of the emerging trend for young people to communicate with video rather than text.