Venture Capital and Price Movements

According to Corrie and Maureen (1)’s readings, the corporation had a market value of $24 billion at the time of its $17 offering. Lightspeed Venture Partners ($485,000 seed money, $7.5 million investment worth 2.1 billion), and Venture company Benchmark ($24 million worth $3.2 billion) are two of the early ventures, according to Winkler (1) and Farrell et al. (3). The rights include the portion of shares owned by an entity r individual that gives it the right to vote on a decision such as in FTSE Russell’s denial to add snap chat and other companies with no voting rights in their index (Richard 1, 2).

Road Show

In the article by Corrie and Maureen (2), they identify the efforts by the Snap executives to win prospective investors in London. Also, the portfolio manager at Navy Capital LLC in London agreed to buy shares, ahead of the offering and IPO opening (Corrie and Maureen 2).

Actions Taken to Stabilize Share Price Once Trading Began

Snap executives put a stabilization agent in charge, Goldman. The bank’s trader will help the individual perform the role through matching buyers and sellers, as well as generate demand to stabilize the stock should Snap struggle by pulling the lever (Corrie and Maureen 3).

Which Groups Received Shares in the Offering?

The offering raised $3.4 billion whereby 200 million shares would be sold, and the division amongst the investors accounting for 120 million by 25 companies, 50 million to existing investors, and lastly 30 million distributed to the rest of the investors (Corrie and Maureen 3).

Initial Pricing Considerations (Target Vs. Initial Price)

The initial price of Snap at the trading of the stock is $14 to $16 per share, though the target surpassed it to end the day at $ 17 (Corrie and Maureen 1).

Price Movements (Day 1 Vs. Since)

The price on 1st March 2017 was $ 17, the next day at $ 26, #17 up to June before dropping to its lowest at $16.99 in mid-June, and in August at a down of $ 13.77 (Wells 2; Wieczner 1; Farrell et al. 4).

What Do You Think Is Driving the Price?

Two factors contribute to the losses of Snap after its launching as an IPO in March 2017. Firstly, there is increased competition from Facebook which has copied most features to its Whatsup application. Secondly, there is a decrease in the number of users per day and sow growth of revenue that contributes to the price volatility.

Works Cited

Corrie, Driebusch, and Maureen, Farrell, “Snapchat Parent Snap Valued at $ 24 Billion After IPO Pricing.” The Wall Street Journal. 2017, pp. 1-4. Web.

Farrell, Maureen., Driebusch, Corrie., and Krouse Sarah, “Snapchat Shares Surge 44% in Market Debut.” The Wall Street Journal. 2017, pp. 1-5. Web.

Richard, Teitelbaum, “Index Firms Take Issue With Nonvoting Rights. The Wall Street Journal. 2017, pp. 1-4. Web.

Wells, Georgia, “ Snap’s Loss Nearly Quadruples as Revenue and User Growth Slow.” The Wall Street Journal. 2017, pp. 1-3. Web.

Wieczner, Jen, “Snapchat IPO Investors Have Now All Lost Money on Snap Stock.” The Wall Street Journal. 2017, pp. 1-3. Web.

Winkler, Rolfe, “Bet on Snap Shows Luck’s Role in Venture Business.” The Wall Street Journal. 2017, pp. 1-3. Web.