Snap Inc’s pop in its trading debut Thursday made the company larger than many established corporations.
Based on the opening price of $US24, the Snapchat parent’s market capitalisation — the total value of its outstanding shares — rose to $US33 billion.
Also, Snap had a more expensive IPO than several other big recent tech IPOs, judging by the value of each dollar of revenue, or the so-called price-to-revenue ratio.
Early investors are betting that the company will be able to increase user engagement with its transient-messaging app, and lure advertisers who can choose Facebook or Instagram instead.
However, Snap is not yet profitable, and there are questions about whether its valuation is justified. None of the three analysts who had ratings on the stock on its first day advised investors to buy.
“Investors in Snap will be exposed to an upstart facing aggressive competition from much larger companies, with a core user base that is not growing by much and which is only relatively elusive,” said Brian Wieser, an analyst at Pivotal Research, in a note.
The chart below shows 17 of the companies Snap became more valuable than on its first day based on market cap.