Snapchat raises $3.4 billion in its initial public offering

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Despite experiencing slow user growth and a net loss of $514.6 million in 2016, Snap, the maker of popular messaging app Snapchat, has raised $3.4 billion in its initial public offering at $17 per share, clinching a reported valuation of $24 billion. The company’s stock continued to climb even though it has yet to receive a single “buy” rating from Wall Street analysts. So why is Snapchat so valuable? Goldman Sachs estimate that the company could reach $2 billion in revenue in 2018, with a projected daily average users of 221 million, a 40% growth from 158 million in 2016. The company indicated that they expect the bulk of the revenue to come from advertising as well as from the sales of their new product, the Snapchat Spectacles, which can record snippets of video that are automatically stored to the user’s Snapchat Memories, a feature that saves snaps, stories and locked content.

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