Instant messaging service Snapchat surged in its debut trade Thursday, jumping more than 40 percent from the level set in the initial public offering Wednesday night.
Snap Inc., trading under the ticker "SNAP" on the New York Stock Exchange, was up about 45.4 percent to $24.72 near 1630 GMT, shortly after logging its first trades. The company's IPO raised $3.4 billion with a price of $17 a share.
The disappearing-picture service is the largest US tech firm to make a market debut since Facebook (NasdaqGS: FB - news) in 2012, and its arrival has been seen by some supporters as an opportunity akin to that social network giant.
More than 158 million daily active users create 2.5 billion "snaps" each day in 20 different languages, generating an expected $936 million in revenues in 2017, according to a report from venture equity firm Goodwater Capital
"Snapchat is well-positioned to scale rapidly and take market share in the $652 billion global advertising market," the report said.
But others are skeptical about the service, pointing to the example of Twitter (Frankfurt: A1W6XZ - news) , which has seen only modest increases in its user base since its 2013 IPO, and now trades well below its offering price.
Lou Kerner, manager of the Social Internet Fund and a partner in the venture investment firm Flight VC, said he is avoiding the offering, concerned that Snapchat's user engagement may have peaked already.
Snap's IPO filing left out details about historical trends for user metrics, he said -- typically not a good sign.
"We know all products have life cycles -- you can look at Twitter for a lesson," he added.