Lucy Nicholson/Reuters
Sarah Buck, 23, (L) recruiter for messaging app Snapchat, talks to job seekers at a booth at TechFair LA, a technology job fair, in Los Angeles, California, U.S., January 26, 2017
The parent company of Snapchat priced its initial public offering of 200 million shares at $17 apiece. That raised $3.4 billion and gave the company a valuation of $23.8 billion.
It will be the first tech IPO of the year, the first offering from a social network since Twitter, and the largest since Alibaba went public in 2014.
Snapchat has matured from a sexting app to one that still deletes messages by default, but is a viable competitor to companies like Facebook and Twitter. According to its IPO prospectus, it posted a net loss of $514.6 million in 2016 and warned that it may never be able to achieve or maintain profitability. It earned $404.4 million in revenue in 2016, up from $58.6 million in 2015.
During the roadshow, investors raised questions about the slowdown in the rate of active users, and how much potential Snapchat has as an advertising platform. Snap said its biggest revenue opportunity is the growing budget for worldwide mobile advertising, which could reach $196 billion by 2020 from $66 billion now.
Snap's stock will debut on the New York Stock Exchange with the ticker SNAP. The shares offered to investors will have no voting rights.