How A Social Media App Boast The Share Market

Snapchat is now on the exchange. The company behind it Snap issued shares worth about 3.4 billion US dollars on Thursday.It is the largest US IPO since Alibaba, 2014. The share started with an issue price of 17 dollars and soared shortly after the IPO by more than 44 percent up.

By Kathrin Werner, New York

Snapchat is an app that does not understand many adults. Every day millions of young people snap a photo of yourself, miss with the app a dog's snout or a wreath of flowers in her hair and send the image to their friends. After 24 hours, it will disappear. Many young people find funny. And perhaps because older people have now given the company behind the app much money: Snap is gone public in New York and has 3.4 ingested billion.

The start was terrific: The share price soared shortly after the IPO by more than 44 percent up. With the issue price of 17 dollars per share snap comes at a stock market value of nearly 24 billion dollars. It is the largest IPO in the US since the Chinese online retailer Alibaba in autumn, 2014.

Snap has chosen a good time: The stock market in the US has been rising for months, investors are looking for investment properties. One reason for this is that for a long time no major company has dared to go public is. 2016 there were only 13 US tech companies, so little they were last in the crisis year 2008. Although start-ups like Uber and Airbnb are already big, but so far did not need to expose themselves to the judgment of investors. Market observers expect that others will follow snap.

Loss 2015 : Half a billion dollars

Because Snaps IPO was a success, though it really did not look so good for the company. It had published financial figures in the prospectus for the first time and added that it is far from winning. Despite rising sales, it comes to around half a billion dollars in annual losses. In addition, the investors could put off that snap share spent without voting rights - something it had never been. Investors who bought the Snap-shares, thus renounced control of her voice, which keep two founders.

Snaps user numbers grew last no longer so fast. One reason for this is that Instagram has simply copied an idea of Snapchat is: so-called stories. Users can publish short videos within 24 disappear hours. Instagram increased its daily active users of 300 million in the third quarter of 2016 to 400 million in the fourth quarter. Snapchat won in the same period added only five million, now there are 158 millions. Instagram is one of Facebook. The high price of snap-share puts the company under pressure to imitate Facebook and to increase the number of users and writing profits. In the next few months remains to be seen, whether that succeeds or whether the stock was overvalued. For the snap-founder Evan Spiegel, 26, and Bobby Murphy, 28, the IPO has certainly paid off, they are now billionaires. For more information read NSE Stock tips

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