Snap's shares pop after year's biggest IPO

Thu Mar 2, 2017 7:42pm EST
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By Lauren Hirsch

NEW YORK (Reuters) - Snap Inc's (SNAP.N: Quote) shares ended up 44 percent on their first day of trading as investors flocked to buy into the hottest technology stock offering in three years, overcoming doubts about the loss-making messaging app company's slowing user growth.

The stock closed at $24.48 on the New York Stock Exchange on Thursday, well above the initial public offering price of $17 per share on Wednesday, giving the company a market value of $28.3 billion, on a par with CBS Corp (CBS.N: Quote) and Target Corp (TGT.N: Quote).

At one point the stock hit a high of $26.05 and a market value of $29.1 billion.

The owner of Snapchat, an app popular with young people for its disappearing messages, raised $3.4 billion in its IPO on Wednesday, more than the $3 billion Facebook Inc (FB.O: Quote) offered to pay for the company in 2013.

With a full greenshoe option to issue more shares likely to be exercised, the company is poised to increase its deal size to $3.9 billion.

That makes it the biggest U.S. technology IPO since Alibaba Group Holding Inc (BABA.N: Quote) in 2014, despite the fact that Snap has never made a profit.

Secretive Snap co-founder Evan Spiegel, who usually favors sweats or a button-down shirt, 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 avoids. He earned $272 million on the offering.

Among the traders on the floor, men and women carried the company's video-camera glasses called Spectacles and stuffed versions of Snap's smiling ghost mascot.   Continued...

Snap cofounders Evan Spiegel (C) and Bobby Murphy ring the opening bell of the New York Stock Exchange with NYSE Group President Thomas Farley.  REUTERS/Lucas Jackson