It’s official: Snapchat stock will start trading on the NYSE this Thursday with the ticker symbol SNAP.
This will be the biggest tech stock IPO since Facebook went public in 2012.
In advance of the initial public offering, I’m hosting a LIVE training event. Specifically, I’m going to reveal how to invest in SNAP stock (and other tech stocks) BEFORE it goes public.
It starts today at 12pm Eastern / 9am Pacific. Click here to RSVP – it’s free.
The IPO is expected to price between $14 – $16 per share on Wednesday night. That would put the company’s valuation at $19.5 – $22.2 billion.
After a road show in New York City and London, Snap (NYSE: SNAP) took the advice of underwriters and agreed to lower its valuation. The company had initially targeted a $20 – $25 billion value.
Snap plans to raise $2.3 billion in the IPO. That cash will be used to fund the company’s aggressive plans to take on Facebook (NASDAQ: FB) as the social network of choice for young adults.
So, what do we expect for SNAP stock once it starts trading on the NYSE?
IPO firm Renaissance Capital reports that the average IPO jumps 14% in its first day of trading. Meanwhile, three-quarters of IPOs post gains in their first day of trading.
Technology-sector IPOs do even better. Over the past five years, the average tech IPO surges 25% on its first day of trading. Only one-fifth of tech IPOs decline during that first trading session.
It appears that Snapchat’s decision to lower its offering price aims to achieve one goal: a pop for the Snapchat stock price in the first day of trading.
Founders Evan Spiegel and Bobby Murphy would rather have positive news headlines about a big jump in their share price. For the sake of retaining and attracting employees, the company is willing to leave a little money on the table for the sake of some positive P.R.
Today’s LIVE webinar reveals how to trade SNAP. Click here for instant access.
Learning from Facebook’s IPO Blunder
Snap will be the biggest U.S. tech IPO since Facebook. And the smaller competitor is clearly trying to avoid Facebook’s IPO mistakes.
When Facebook went public, the IPO was priced at $38. That was above the initial target range. And greedy investment bankers increased the size of the offering by 25%.
By increasing the size of the offering – and increasing the share price – the underwriters set themselves up for failure.
Facebook stock briefly traded up to $45. By the end of the trading day, shares were trading below the opening trade. And the company’s underwriters had to step into the open market and buy shares to support the stock price.
One week later, the stock had fallen below $27. And many investors were skeptically viewing Facebook as a broken IPO and overpriced stock.
Snapchat Stock: Access
Snap’s founders and bankers are very familiar with the Facebook IPO missteps. And it looks like they’re taking steps to avoid a similar outcome.
Most folks don’t have a chance of getting shares in the Snap IPO. It’s nearly impossible, unless you have a buddy who’s an executive at Snap.
If you’re excited about this IPO, you’ll have to wait until Thursday morning when the stock opens for trading.
Or you can click here to discover how to invest in Snapchat and other “pre-IPOs” using a secret backdoor.
My LIVE webinar will share the details. It all starts today at 12pm Eastern / 9am Pacific.