Snap sets IPO price above forecast

LOS ANGELES Snap, Inc., the parent company of the communications app Snapchat, priced its shares at $17 each Wednesday, in the biggest U.S. tech listing inmore than two years.

The price was abovethe $14-$16 range it set two weeks ago, a sign of strong demand. The Venice, Calif. company said it was selling 200 million shares, raising $3.4 billion from the IPO.

The offering makes it the largest U.S. tech IPO since Alibaba raised $25 billion in2014, and the largest for a U.S.-based tech company since Facebook’s $16 billion offering in 2012, according to Dealogic.

Snap shares are set to start trading on the New York Stock Exchange under the ticker SNAP Thursday.

The IPO is unusual in that investors aren’t granted voting rights, with Reuters calls “an unprecedented feature that has raised concerns among corporate governance leaders that other high-valuation companies may follow suit and leave investors with little say over company operations.”

The price values Snap at a little under $24 billion, around the valuation of Google at the time of its IPO but far smaller than Facebook, which was valued atover $81 billion when it debuted, according Dealogic.

“The IPOmarket hasnt had a deal like this in over two years,” notes Matt Kennedy, an analyst with Renaissance Capital. “If you’re a tech investor, you haven’t had anything to look at in awhile.”

Any new tech IPO would receive lots of attention, he notes, and while “there are many questions” about Snap’s futurei.e., its ability to turn a profitthe company “has many things going for them,” Kennedy says. He points to a huge user base of over 158 million daily active users who spend lots of time on the app.

“Investors have shifted to placing the premium on growthand Snap is capitalizing on that,” he says.

Mike Loewengart, the vice-president of investment strategy for online broker E*TRADE, suggests that investors take a step back before jumping in.

“Investors are wise to let the hype cool once it hits the public markets,” he says. “While highly anticipated IPOs of this magnitude may be tempting to jump in immediately, historically many IPOsparticularly social media companiesoften need time and room to acclimate to the rigors of being a public company.”

The huge Snap IPO is expected to usher in a revitalized market this year, encouraging IPO debuts by other name tech startups.

Macroeconomic and geopolitical turmoil that roiled markets last year are expected to yield to an exuberant market trading at record highs anda stream of high-profile companies in the IPO pipelinein 2017.Among the possible candidates: Hootsuite, Dropbox and Spotify.

“Snap will be a jolt to the tech IPO market,” says Angelo Zino, an analyst at CFRA Research.

The tech IPO market is poisedfor a comeback in 2017 after a dismal 2016 the worst worldwide this decade. Last year,only 53 tech companies raised $8.7 billion in initial public offerings, down 42% and 68%, respectively, from2015, according to PricewaterhouseCoopers.

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Snap Inc., the parent company of Snapchat, the company Snap Inc., the parent company of Snapchat, the company behind snapchat debuts on the New York Stock Exchange on March 1, 2017, under the ticker symbol SNAP. Shares are expected to price March 1 after the market closes and begin trading on Thursday. Snap is aiming to sell shares around $14 to $16 a share, giving the company a valuation of up to $22.2 billion.  Carl Court, Getty ImagesFullscreenIn this Thursday, Oct. 24, 2013, file photo, Snapchat In this Thursday, Oct. 24, 2013, file photo, Snapchat CEO Evan Spiegel poses for a photo in Los Angeles. Snap Inc. is listing the company’s valuation at up to $22 billion as it prepares for the tech industry’s biggest initial public offering in years. The parent company of SnapChat said in a regulatory filing Feb. 16, 2017, that the IPO is likely to be priced between $14 and $16 per share.   Jae C. Hong, APFullscreenA logo for Snapchat hangs on the front of the New York A logo for Snapchat hangs on the front of the New York Stock Exchange in New York on Nov. 17, 2016.   JUSTIN LANE, EPAFullscreenIn this photo the Snapchat app is used on an iPhone In this photo the Snapchat app is used on an iPhone on October 6, 2014, in London, England. Snapchat allows users’ messages to vanish after seconds.  Peter Macdiarmid, Getty ImagesFullscreenCo-founder of Snapchat Evan Spiegel (L) and model Miranda Co-founder of Snapchat Evan Spiegel (L) and model Miranda Kerr attend the 2016 Pre-GRAMMY Gala and Salute to Industry Icons honoring on Feb. 14, 2016. in Beverly Hills, Calif.  Jason Merritt, WireImageFullscreenThis April 29, 2014 file photo shows Snapchat co-founders This April 29, 2014 file photo shows Snapchat co-founders Evan Spiegel and Bobby Murphy attending the Time 100 Gala, celebrating the Time 100 issue of the Most Influential People In The World at Jazz at Lincoln Center in New York. After a dearth of technology listings in 2016, Snapchat parent Snap is set for its market debut as early as this week. The initial public offering (IPO) if successful could presage a wave of listings from the sector’s so-called “unicorns” — those with a valuation of at least $1 billion based on private funding sources.  TIMOTHY A. CLARY, AFP/Getty ImagesFullscreenLos Angeles Mayor Eric Garcetti wears a pair of Snap Los Angeles Mayor Eric Garcetti wears a pair of Snap spectacles at the TechFair LA a job fair that featured 250 tech firms including Snap. Organizers said that 10,000 people registered for the event.   Robert Hanashiro, USA TODAYFullscreenA long line of attendees wait to be interviewed at A long line of attendees wait to be interviewed at the SnapChat booth at the TechFair LA.  Robert Hanashiro, USA TODAYFullscreenIn this Monday, Nov. 28, 2016 photo, a vending machine In this Monday, Nov. 28, 2016 photo, a vending machine containing Spectacles stands in a closed store, in New York. Snap is managing to remain hip and even has an unconventional distribution strategy for Spectacles, $130 sunglasses that take video for sharing on Snapchat. Users can’t just order one online yet. Rather, they have to find a vending machine or temporary store popping up with just 24 hours’ notice. So far, vending machines have showed up near the company’s headquarters in the Venice Beach section of Los Angeles, as well as in Big Sur, California, and New York.  Mark Lennihan, APFullscreenIn this Tuesday, Nov. 29, 2016 photo, customers cover In this Tuesday, Nov. 29, 2016 photo, customers cover up under umbrellas as they wait to purchase Spectacles, in New York.   Mark Lennihan, APFullscreenDelilah Hamlin walks the runway wearing Spectacles Delilah Hamlin walks the runway wearing Spectacles by Snap Inc. during rehearsal at the Sherri Hill NYFW Fall 2017 Runway Show during New York Fashion Week at Gotham Hall on February 13, 2017, in New York.  Astrid Stawiarz, Getty Images for Sherri HillFullscreenDJ Khaled posts a Snapchat with Harvard Business School DJ Khaled posts a Snapchat with Harvard Business School Professor of Business Administration, Anita Elberse, during the Get Schooled Snapchat College Tour and Meet at Harvard University on December 9, 2016, in Cambridge, Mass.  Scott Eisen, Getty Images for Get Schooled FoundationFullscreenThe Snapchat app came under fire in April 2016 after The Snapchat app came under fire in April 2016 after it released a filter critics said amounted to a digital version of blackface. The filter attempted to honor late reggae icon Bob Marley by letting users take a selfie in Snapchat and then altering the image to make the user look like Marley, complete with dreadlocks, a colorful hat and brown skin.  SnapchatFullscreenThe logo and a page of mobile app 'Snapchat' are displayed The logo and a page of mobile app ‘Snapchat’ are displayed on tablets on January 2, 2014 in Paris.   Lionel Bonaventure, AFP/Getty ImagesFullscreenThe Snapchat logo is seen at the front entrance of The Snapchat logo is seen at the front entrance of the company’s new headquarters on November 14, 2013 in Venice, Calif.  Kevork Djansezian, Getty ImagesFullscreenSnapchat CEO and co-founder Evan Spiegel poses in Snapchat's Snapchat CEO and co-founder Evan Spiegel poses in Snapchat’s Venice, Calif. headquarters on May 16, 2013.  Jefferson Graham, USA TODAYFullscreenLike this topic? You may also like these photo galleries:ReplaySnap Inc., the parent company of Snapchat, the company1 of 16In this Thursday, Oct. 24, 2013, file photo, Snapchat2 of 16Alogo for Snapchat hangs on the front of the New York3 of 16In this photo the Snapchat app is used on an iPhone4 of 16Co-founder of Snapchat Evan Spiegel (L) and model Miranda5 of 16This April 29, 2014 file photo shows Snapchat co-founders6 of 16Los Angeles Mayor Eric Garcetti wears a pair of Snap7 of 16A long line of attendees wait to be interviewed at8 of 16In this Monday, Nov. 28, 2016 photo, a vending machine9 of 16In this Tuesday, Nov. 29, 2016 photo, customers cover10 of 16Delilah Hamlin walks the runway wearing Spectacles11 of 16DJ Khaled posts a Snapchat with Harvard Business School12 of 16The Snapchat app came under fire in April 2016 after13 of 16The logo and a page of mobile app 'Snapchat' are displayed14 of 16The Snapchat logo is seen at the front entrance of15 of 16Snapchat CEO and co-founder Evan Spiegel poses in Snapchat's16 of 16AutoplayShow ThumbnailsShow CaptionsLast SlideNext Slide

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