The parent organization of Snapchat, Snap Inc. has shown a vertical trend while it made its debut on the stock market yesterday.
The stock closed at $24.48 the previous day with a gain of 44% from IPO price of $17. While today it surpassed $29 in the beginning of the day seeing a 20% rise which was recorded at the end of yesterday. However the shares fell $2 later today leaving it at $27, which made sure it remains on the track for a 10% gain at the end of day two.
This clearly shows that Snap couldn’t get as much money as they could. They could have made a solid first impression by selling their shares at $19 or 20$ that would have grabbed them millions of dollars more than what they got now.
Adding to it more, there is no surety that their soaring trend will last. Most of the times the excitement offered by the IPOs in the initial stages just fades off.
Snap still has to face stiff challenges ahead as it moves to the competitive world. According to Atish Davda the CEO of EquityZen, the company’s growth has slowed down and it still hasn’t faced or posed any threat to the leading social giant Facebook to prove its worth and viability.
Instagram which is owned by Facebook works on the same mechanism as Snapchat was thrown in the market last year and saw tremendous success since it started. It is believed that Snapchat’s slow user growth started during the time when Instagram was released.
According to today’s numbers, Snap has captured about $38 billion. This amount is significantly high as compared to Snap’s private market valuation. Surprisingly this amount is also larger than the major brands like American Airlines and Hilton.
Only time will show whether their initial vertical up rise continues and do they match Facebook, which has seen a significant growth since 2012 IPO or Twitter.
