Based on the opening price, the market capitalization (value of total outstanding shares) of Snap Inc. increased to $33 billion. Early investors in the company are better that Snap will be able to increase user engagement and bring in new advertisers that may have gone to Facebook or Instagram.
The valuation of the company has yet to be justified since Snap Inc. has yet to generate a profit. In a note to investors, Pivotal Research analyst Brian Wieser said:
“Investors in Snap will be exposed to an upstart facing aggressive competition from much larger companies, with a core user base that is not growing by much and which is only relatively elusive.”
Even though Snap just went public and started trading today, the company is already more valuable than 17 well-known brand names, including Twitter, BestBuy, Target, and American Airlines. Business Insider has posted a chart that nicely displays this data.
What are your thoughts on Snap’s opening stock price and market cap? Let us know in the comments below.