VENICE (CBSLA.com) — Snap Inc., parent company of the photo/video-sharing Snapchat phone app, went public Thursday, opening at $24 a share, far above the initial share price of $17.
The Venice-based company offered 200 million shares of stock, putting the total value of the initial public offering at $3.4 billion. Shares were traded on the New York Stock Exchange under the symbol SNAP.
Thursday’s successful IPO transformed some of the employees into overnight millionaires. And local realtors and money managers are hoping to cash in.
“Our flagship product, Snapchat, is a camera application that was created to help people communicate through short videos and images,” according to the company’s filing with the Securities and Exchange Commission. “We call each of those short videos or images a Snap. On average, 158 million people use Snapchat daily, and over 2.5 billion Snaps are created every day.”
The filing also touted the company’s latest innovation, Spectacles, which are sunglasses that connect video directly with Snapchat.
The company was co-founded by Evan Spiegel and Bobby Murphy, who created Snapchat in 2011 while attending Stanford University.
Snapchat’s IPO was the most highly anticipated since Alibaba went public in 2014, but not everyone was happy about it.
The tech company’s Venice neighbors have been protesting this week in advance of the IPO, blaming Snap for gobbling up commercial and private real estate and making the area unaffordable and ruining the community feel.
According to the Snap’s filing, the company had revenue of $404.5 million in 2016, up from $58.7 million in 2015. But the company still recorded a loss of $514.6 million last year.
Fortune magazine reported that there is concern that Snapchat may have already maximized its reach due to competition from other popular apps. About 150 million people use Instagram Stories daily after it was copied wholesale from Snapchat, while a similar feature is also being added to WhatsApp. Both Instagram and WhatsApp are owned by Facebook.
The magazine also reported that Snap’s extreme generosity with its employees could further complicate things.
Thursday’s IPO means 185 million restricted share units distributed in previous years will vest the same day, enriching 1,859 employees by $2.9 billion, according to Fortune. Most of that windfall will go toward the company’s top executives, with CEO and co-founder Spiegel set to receive 37 million shares over three years.
(© Copyright 2017 CBS Broadcasting Inc. All Rights Reserved. City News Service contributed to this report.)