Snap surges above its IPO price after its big earnings beat

  • Snap crushed Wall Street expectations during the fourth quarter.
  • The stock soared as much as 29% in after-hours trading, eclipsing the initial public offering price for the first time since July.

Snap shares skyrocketed as much as 29% Tuesday to more than $US18 apiece in after-hours trading after the company beat Wall Street expectations. Tuesday’s after-hours gain has Snap trading back above its initial public offering price of $US17 for the first time since July.

The social media company posted an adjusted loss of $US0.13, beating the $US0.16 loss that was expected. Revenue soared 72% year-over-year to $US285.7 million, beating the $US252.8 million that Wall Street was anticipating. The number of daily active users spiked 18% YoY to 187 million, topping the 184.3 million that analysts were looking for.

Snap priced its IPO on March 1 at $US17, and the stock reached a high of $US29.44 just two days later. Then, the company fell out of favour on Wall Street, hit by a slew of analyst downgrades. It bottomed out at $US11.24 a share in August.

But shares began to rebounded as Tencent took a 10% stake following the company’s dismal third-quarter results and after the company announced a redesign to its app.

Snap shares are up about 23% this year.

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