Wednesday, the 1st of March 2017, will be a date that the global financial world will remember for a very long time. It was the day of the hottest tech IPO since Facebook’s IPO in 2012. Snap Inc., the parent company behind social media phenomenon Snapchat has priced its initial public offering above the target range, raising $3.4 billion, with a market valuation of nearly $24 billion. It’s quite safe to say that the company has exceeded everyone’s expectations, including their own. So what makes Snap Inc. so special, you ask? let’s start off with the facts:
• Snapchat’s key assets are its daily active users: 158 million and counting…
• Snap Inc. as a business is more similar to Facebook than to Twitter. It’s more personal, and users are far more engaged.
• Investors bought the shares despite having no voting power (CEO Evan Spiegel retains control over 90% of company’s voting rights).
• It’s the 1st camera company that has the potential to raise up to an additional $510 million on top of the $3.4 billion it already raised.
How Attractive Does the SNAP Stock Look?
It seems like Snap Inc. is an amazing business with a very coveted user base. While the average day trader looks at SNAP as the dominant communication app amongst 13-to-28-year old’s, we must always remember that this falls directly into the advertiser’s most valuable target segment. This is worth an unprecedented amount of money to the company, and eventually to you, as an investor.
In fact, SNAP shares closed the first day of trading at $24.48, up 44% from its opening offer of $17. And if you compare this figure with this decade's most famous tech IPOs (Alibaba, Facebook and Google), it had a better opening day than all of them. So, after reading this, why should you invest in Snapchat after all?
1. All 200 million shares, priced at $17, were sold.
2. Out of the 200 tech companies that held IPOs on US stock exchanges since 2010, the median stock return is 18% from the IPO price.
3. Snapchat’s biggest revenue opportunity is the growing budget for worldwide mobile advertising.
4. Investors worldwide are hungry for new opportunities, after 2016 marked the slowest year for IPOs since 2008.
5. The company registered a near X7 growth in revenue ($404 million in 2016, compared to $58 million in 2015)
When is the Ideal Time to Trade on SNAP?
As you may well know, no one can speculate with a 100% certainty whether a stock is about to rise or fall in price. Having said that, after such a strong opening, the following weeks are bound to be exciting for the SNAP stock and investors across the globe. Using Opteck’s online trading platform, you can now trade on SNAP. The stock is available since its market debut on the New York Stock Exchange (Thursday) and you can find it under the “Stocks” category on the asset index. If you haven’t done so yet, you are more than welcome to register with us and start trading SNAP. For further updates, make sure you stay tuned to our daily market analysis.