Snapchat IPO Raises $3.4 Billion

Cashing In

SNAP INC., parent company of SNAPCHAT, just raised $3.4 billion in its IPO, selling 200 million shares at $17 apiece, which values the company at $23.8 billion, BUSINESS INSIDER reports. That beats its own expectations to raise $3.2 billion by offering shares at between $14 and $16, which would value the firm at almost $22 billion. But heavy demand drove the share price to $17 or $18.

Shares will begin trading on THURSDAY under the ticker SNAP.

While GOLDMAN SACHS believes SNAP's revenue will rise to $2 billion by 2018 — a fivefold increase over 2016 sales -- a slowdown in user-base growth has some analysts concerned. "The deceleration in user growth is a clear indicator that SNAP is losing its snap," CARBON INVESTMENT PARTNERS portfolio manager LEE BRESSLER said before the IPO pricing. "INSTAGRAM's Stories feature is a direct competitor and will continue to take market share. This could be the next TWITTER, or worse, MYSPACE."

In the end, however, investors bet on SNAPCHAT's potential, which is to "create the best camera platform so we can drive engagement and monetize that engagement through advertising," Chief Strategy Officer IMRAN KHAN said in a pre-IPO video.

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