Snap Inc. got listed on bourses; jumped 44% at close on day 1

Snap Inc., the entity which own Snapchat, got listed on the Wall Street on Thursday, and in a euphoria moment, ended the day up 44% at $24.48 per share valuing the firm at $28 billion which is higher than the current market valuation of Twitter. The company priced its share at $17 apiece during the listing. The startup has more than 158 million daily active users creating 2.5 billion “snaps” a day in 20 different languages. It expects $936 million in revenues in 2017, and has partnerships with major brands and publishers.

However, there is a downside to the fairy tale of listing. The company hasn’t turned profitable yet, and is expected to bleed money for some time. Such high valuation for a startup which is in losses is a surprising development for the trading world. Therefore some analysts are also skeptical about the firm’s prospects and valuation. Pivotal Research Group stated that “Snap is a promising early stage company with significant opportunity ahead of itself. Unfortunately, it is significantly overvalued given the likely scale of its long-term opportunity and the risks associated with executing against that opportunity.”

The company banks on the youth factor for its growth since majority of its users are of below 30 age group. However, it has been gaining traction with older smartphone users as it expands its offerings of content from its media partners. It remains unclear if Snap can expand beyond its core base of young users or how it will fare in many international markets in a competitive social media landscape. But it is a dream start for Snap and the firm will try to leverage this popularity.