Projections exceeded for Snapchat IPO

Snap Inc, parent company of social media platform Snapchat, priced its initial public offering above its target range yesterday (Wednesday) as it today prepares to begin trading on the New York Stock Exchange.

Snapchat has built a steadily growing presence in the sports media market and had targeted a valuation of between $19.5bn (€18.36bn) and $22.3bn. However, Snap priced 200 million shares on Wednesday night at $17, above its stated range of $14 to $16 a share, placing its market valuation at roughly $24bn.

This valuation is more than double that of rival social media company Twitter and represents the richest in a US technology IPO since Facebook in 2012. The Reuters news agency said Snap’s book was more than 10 times oversubscribed and the firm could have priced the IPO at as much as $19 a share, but instead has opted to focus on securing mutual funds as long-term investors rather than hedge funds looking to quickly sell.

Snap co-founders Evan Spiegel and Bobby Murphy will retain a tight hold on Snap’s stock through a unique three-share class structure. The structure will give Spiegel and Murphy the right of 10 votes for every share. Existing investors will have one vote for each of their shares, while new investors will have no voting rights.

In December, US cable-television broadcaster Turner Broadcasting System said it would create more video content for Snapchat, including sports programming, under an expanded partnership.

Under Turner’s agreement with Snap, the former will continue to create Live Stories – collections of user-submitted photos and videos – around sports events. The properties covered by the deal include the March Madness men’s college basketball tournament and golf’s PGA Championship.

The European Handball Federation last month launched a new magazine show on Snapchat for its Champions League club competition.