Snapchat flotation soars in US
Two more young social media owner billionaires were created when Snapchat shares were floated on the US market, known as Snap Inc.
With the Initial offer at US$17 a share, the opening price of US$24 represented a 41% increase and confirmation that the markets have not fallen out of love with social media companies, though they do give investors a rough ride at times. Having amassed a gigantic follower base, it is not always clear how the company can be monetised without destroying the reasons why they attracted these believers in the first place. Snapchat is also yet to make a profit, with total losses since it was created back in 2011 of over US$1 billion, half of that in their 2016 trading period.
Small matters in the current euphoria and enthusiasm for Social Media shares, though some forecasters are predicting a possible single share valuation of US$10, if the loss making isn't rectified quite quickly. Social media users are also notoriously fickle and always ready to be up there with fashion and try out the next big thing, alongside their friends, with Instagram and Facebook being their closest rivals for the attention of Millennials.
Snapchat owners, Evan Spiegel and Bobby Murphy, retain 17 % of the company each, which at the opening offer price made them multi billionaires with shares valued at US$ 4 billion.
Post Date: March 3rd, 2017