US-based visual media platform Snap closed its initial public offering at $3.91bn yesterday, after the IPO’s underwriters took up the option to buy an extra 30 million shares.
Snap floated on Thursday last week, issuing 145 million shares priced at $17 each, which were joined by 55 million shares divested by existing backers to raise an initial $3.4bn, giving exits to investors including e-commerce firm Alibaba and internet companies Tencent and Yahoo.
NBCUniversal subsequently revealed that it invested $500m in Snap through the offering, giving it a stake sized at approximately 2.1%. It plans to increase the number of series its media brands are running on Snap’s Snapchat app, which allows photos and videos to be shared.
Snap is best known for the Snapchat platform but its IPO filing indicates its long-term plans involve expanding into an all-purpose visual media company that will also delve into hardware.
Snap had raised about $2.6bn in venture funding at the time of the IPO, its largest shareholders including venture capital firms Benchmark Capital and Lightspeed Venture Partners, which sold approximately 16.3 million shares in the offering between them.
The IPO has drawn attention both for the high valuation considering Snap has only just begun generating money – it floated at 60 times revenue – and for the lack of voting rights given for buyers of the shares.
Although the company’s stock initially rose sharply, increasing by 54% on its first two days of trading to reach a high of $29.22, it has subsequently fallen in price and finished at $21.44 last night.
Morgan Stanley, Goldman Sachs, JP Morgan, Deutsche Bank Securities, Barclays, Credit Suisse and Allen & Company were book-running managers for the IPO.
– Photo courtesy of Snap, Inc.