>> The hottest tech IPO in years, Snap, parent company of messaging app Snapchat, valuing itself at up to $18.5 billion Thursday. That equates to $14 to $16 a share. The evaluation at the lower end of the expected range, still making it the largest US listed tech offering since Alibaba went public in 2014, but perhaps reflective of some red flags, explains Reuters breaking views columnist Jeffrey Goldfarb.
>> So first is the user growth is slow and the daily active users is only up about 3% going from the third quarter to the fourth quarter. That's scary. The other thing is the corporate governance is a real problem. This is the first time we've had an IPO, where the new shares being sold, come with no votes at all.
But to start out that way, by telling your shareholders you have absolutely no say in what this company is gonna do, is definitely troubling.>> The biggest prize is to go to its two founders, CEO Evan Spiegel and Chief Technology Officer, Bobby Murphy. Each well set to cross the billion dollar mark with their holdings.
If social media stocks have proven one thing, it's let the buyer beware. While Facebook shares have soared, Twitter's have been stripped by roughly a third since that company's 2015 public debut. Still, a dearth of IPOs, with last year one of the worst on record for new stock issues, may have investors chomping at the bit, despite the risks.
Snapchat's final share price to be set after feedback from investors possibly as soon as March, 1st.