Snap's shares shot higher amid strong demand after the company debuted on the New York Stock Exchange. Fred Katayama reports.
Investors snapping up Snap's shares in a frenzy. Shares rocketed higher on their first day of trading on the New York Stock Exchange opening at $24, rising more than 40 percent in morning trading. The owner of the popular Snapchat messaging app priced 200 million shares on Wednesday at $17 each, and raised $3.4 billion. That was above expectations. Its initial public offering was oversubscribed more than ten times, indicating big demand for the shares. Snap now officially sports a market value of roughly $24 billion. That's more than double the size of rival Twitter. And that's richest valuation for a U.S. tech IPO since Facebook five years ago. CFRA analyst Scott Kessler says investors are looking for fresh opportunities and Snap's timing couldn't be better. (SOUNDBITE) SCOTT KESSLER, EQUITY AND INDUSTRY RESEARCH ANALYST, CFRA, (ENGLISH) SAYING: "Very much like Facebook before, the key to the company's longer term success is whether they're able to move from more of a niche product, catering to younger people, to one that becomes wider, not just demographically, but around the world. And that's really the challenge of the company as they look to move from a niche product to a mass market product, and monetize accordingly." Despite a nearly seven-fold jump in revenue, the five-year old company's net loss widened 38 percent last year. Snap also faces intense competition from larger rivals, such as Facebook's Instagram. It's also struggling with decelerating user growth.