adminNEW YORK. – Snap priced its public offering at $17 a share on Wednesday, two sources told CNBC, and the company later confirmed in a press release.
At 200 million shares, Snap will have raised $3,4 billion and will be valued at nearly $24 billion.
The IPO is 12 times oversubscribed, the sources said, meaning that there were 12 times more orders for than there were shares offered.
Some managers told CNBC they got as little as 2 percent of what they were asking for.
The IPO is 12 times oversubscribed, sources said Thursday morning, meaning that there were 12 times more orders for than there were shares offered.
Some managers told CNBC they as little as 2 percent of what they were asking for.
Sources had told CNBC earlier this week that investors were expecting a pricing of $17 to $18 per share, above the $14 to $16 per share range originally given by the company.
The pricing and high demand reflect what Wall Street’s top investment firms think about the stock, and telegraphs how the year’s most anticipated IPO might fare in the public market yesterday.
It could take anywhere from 20 minutes to two and a half hours to get an IPO trading, NYSE Group President Tom Farley told CNBC’s “Squawk on the Street” yesterday.
“This whole group of brokers, they’re communicating with a broader set of investors,” Farley said.
“We won’t open just because people want us to open, or at a particular deadline. We’ll take as long as it takes to have that price iteration slow down so you can have a smooth open.”
The company behind Snapchat — an ephemeral photo messaging app that’s viral among teens — has presented investors with some unique challenges.
It’s unclear how exactly the California company plans to make a profit, especially with daily active user growth slowing.
Shareholders will also get negligible voting rights with the stock.
But Snap, which will trade on the New York Stock Exchange under “SNAP,” is also one of the few new growth opportunities to hit the public market. While stock markets keep notching record highs, there have been a dearth of public offerings.
Proceeds from the US IPO market were only $18,8 billion last year, according to Renaissance Capital, down from $86,6 billion in 2014.
Still, many companies price high and sell low, and vice versa. Facebook, for instance, saw shares seesaw on its first trading day, ending less than 1 percent higher. Since then, of course, Facebook found its footing, and has risen about 250 percent.
It hit an all-time high yesterday. – CNBC.
Online Reporter