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Snap Inc. Continues To Do Well During Second Day of Trading

By , March 3rd, 2017 | One Comment


Snapchat Inc.
Snap Inc., Snapchat’s parent company, is having a great second day of trading. The company, which debuted on the New York Stock Exchange yesterday, opened with the IPO price of $17 and finished the day at $24.48. This means that Snap Inc. saw a 44 percent premium during its first day on the market.

About Snap Inc.

Not everyone got the chance to purchase Snap Inc. at its opening price of $17. The IPO price was reserved for a smaller group of investors. Most investors didn’t have a chance to buy stock in the company until today when it opened at $24.48. per share.

Snap Inc., like many other social media companies, waited a while to go public and it seems it picked an odd time to do so. Snap is still in what investors would call the monetization phase of the company. Snap’s growth has slowed down and the company is fairly unprofitable. That didn’t stop people from investing in Snapchat Inc. during its first day on the market.

In fact, most of its first investors say they are investing in Snapchat because of its ability to change and mold to social media trends. Tech Crunch reported that Hemant Taneja, one of the early Snap Inc. investors, said he was excited about Snapchat because of the “richness of innovation.” Taneja said that he was able to see that Snapchat founder Evan Spiegel was “determined to make technology work for us, rather than change behaviors necessarily — like with ephemeral nature of communications.”

Investing and Social Media

Snapchat isn’t the first social media company to go public. Popular social media sites like Twitter are traded publicly. Facebook’s Mark Zuckerberg made the news a few years ago when he finally opened Facebook Inc. up to the NYSE. On Facebook Inc.’s first day on the market things went rather slow. Facebook’s most significant growth was in the months that followed.

Unlike Facebook, Snap Inc. did not have a slow first day. It blew up and almost grew 45 percent during its first 24 hours on the market. This could be a good or bad sign.

Snap Inc. VS Other Social Media Companies

Snap Inc.’s debut on the market practically mirrors what happened when Twitter went public back in 2013. So, will Snapchat Inc. see the same fate as Twitter is seeing now? Will it fizzle out? Well, many analysts are estimating that the photo-based social media may even surpass Facebook Inc. on the stock market. However, it is possible that trading of the company will die down in months to come.

Whatever the outcome of Snap Inc.’s time on the stock market, one thing is for sure. There is an all new era coming to trading. It is likely that you will see more apps, websites and tech-based companies becoming available to invest in on the NYSE. The future of investing lies with companies that are willing and able to stay trendy and cater to younger audiences.

What do you think about Snapchat Inc.? Would you invest in a social medium?

Photo: Bloomberg

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Comments

  • Alexa Mason says:

    I don’t think I would ever invest in a social media platform. It seems like too much of a risk. The site could crash or their could be some big leak. I would rather put my money into something safe like an IRA.

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