Snap Inc has shrugged off investor concerns over a lack of profits with the business being valued at almost $24bn ahead of its eagerly anticipated IPO.
Snapchat's parent company has priced its shares at $17 each. At the higher end of expectations, the final figure cements Snap as the largest US tech IPO since Alibaba in 2014, topping estimates of between $19.5 and $22.3bn and valuing it at more than double what Twitter is worth.
At $17 per share the stock was more than 10 times oversubscribed by eager investors clamoring for a stake, presenting Snap with the option of gunning for $19 per share – but it ultimately settled for the lower price to secure long term investors rather than hedge funds seeking a fast buck.
Despite winning over the markets Snap remains far from profitability, posting a 38% increase in net losses last year despite a seven-fold rise in revenues. In its IPO filing it has promised investors growth, but not revenue in the short-term.
Snap stock will begin trading today on the New York Stock Exchange, the US market opens at 9.30AM and Fortune reports that Snap shares are expected to start trading between 11AM and 11.30AM.
Another winner of the IPO is Snap co-founder Evan Spiegel whose 17% stake in the business will be worth $4.05bn afterwards, validating his personal crusade to win over skeptical investors.