Snapchat Goes Public

Snapchat is six years old and has become popular among younger generations. It allows users to take pictures and add cartoonish images with this app. This social media company just went public and now trades on NADSAQ under symbol “SNAP.”

 

Within the first couple of days, the stock price rose substantially, and now the company is worth $30 billion. This makes a Price/Sale ratio of 77, while the company isn’t profitable yet. This worries many analysts who feel the price isn’t warranted by fundamentals. But, speculators love to trade it.

 

According to CNN Money, Snapchat is now worth more than Delta Airlines or CBS. In fact, its market value is higher than that of nearly 400 companies on the S&P 500 list.

 

The company lost over $500 million last year, and this is up from over $370 the year earlier.

 

In the past, investors who bought Facebook and Google have prospered. But Twitter has disappointed investors. What makes Snapchat so special to warrant its valuation? Some believe the company has lots of potential when it comes to monetization. Others don’t think this stock is worth the money.

 

“It is significantly overvalued…We value Snap at $10 per share,” claimed Brian Wiesel, an analyst at Pivotal Research.

 

What’s more, Snapchat’s user growth has halted in the last months of 2017 after Facebook launched Instagram feature that copies much of what Snapchat has to offer.

 

Whether overvalued or not, investors won’t have much to say yet. The majority of the votes are in the hands of Snapchat’s founders.