Snap Inc, the parent company of photo-sharing app Snapchat, announced on Wednesday evening that 200 million shares would be sold for $17 a piece when it starts trading on the New York Stock Exchange (NYSE) on Thursday under the ticker symbol SNAP.
The social media giant will sell 145 million of those shares — allowing it to raise more than $2.4 billion — while executives and early investors will pitch in 55 million shares that they amassed before the initial public offering and take proceeds of $935 million home.
Benchmark Capital, Lightspeed Venture Partners, and General Catalyst are among the investors that planned to sell shares.
Evan Spiegel and Bobby Murphy, co-founders of Snap, both planned to sell 16 million shares in the offering, bringing in about $272 million each. Meanwhile, Snap’s chairman Michael Lynton planned to sell almost 55,000 shares in the offering, bringing in more than $930,000.
Spiegel and Murphy will maintain control over Snap’s shares through a three-share class structure. The structure will give the co-founders the right of 10 votes per share, while existing investors will have one vote per share and new investors will have no voting rights.
The flotation values Snap at $24 billion, despite the company not ever turning over a profit.
In early February, Snap released its financial statement for 2016, reporting $404.5 million in revenue — almost seven times the $58 million reported in 2015. However, the Los Angeles-based company incurred a $514.6 million loss for the year.
In a filing with the Securities and Exchange Commission, Snap admits it “may never achieve or maintain profitability”.
Snap’s social media app has 158 million average daily active users as of Q4 2016. Its revenue per user sits at $1.05.
Snap was expected to price its shares between $14 and $16, which would have valued the company between $19.5 billion and $22.3 billion.
However, high interest led some to speculate that the company would raise its share price. The counterpoint for a high share price was that it could lead to Snap trading flat on opening day.
In February, Snap admitted its reliance on Google Cloud — even citing it as a risk factor in its SEC filing — and said it would be spending $2 billion over the next five years with the search giant.
In addition to its commitment to Google, Snap said it would spend $1 billion with Amazon Web Services (AWS) over the next five years, noting in its SEC filing that it will use AWS for “redundant infrastructure support of our business operations”.