The hottest tech debut of the year is happening Thursday, as Snap Inc. goes public.

The parent company of the messaging-app Snapchat raised $3.4 billion in the tech industry's largest initial public offering since Twitter. At $17 a share, the company was valued at $23.8 billion.

Some analysts have questioned whether that valuation is justified, as Snap has not yet turned a profit and the success of its advertising model remains uncertain.

The shares were indicated to open for trading at $22 to $24 a share, most likely pushing the valuation higher.

One of the biggest tech IPOs of the past several years offers a troubling example of what can happen to sky-high valuations when a social network goes public.

In a note to clients ahead of Snap's IPO, Birinyi Associates published a flashback of Facebook's tumultuous first trading day. Here's Jeffrey Yale Rubin's recap (emphasis added):

"In the days and weeks leading up to the Facebook IPO, there were concerns among Wall Street analysts about Facebook's appropriate valuation as additional shares were to be sold due to high demand. Other analysts expressed unease about FB's business model with advertising and privacy clashing among growth concerns.

"Trading was expected to begin at 11:00 a.m. Eastern Time. However, trading was delayed until 11:30 am due to technical problems within the NASDAQ exchange and subsequent IPO cross. After opening Facebook's share value fell during nine of the next thirteen trading days. The day after the IPO (May 21st), the stock closed below its offering price, at $34.03. The stock saw another large loss the next day, closing at $31.00. Not until August 2013 would the stock trade above the first day's closing price."

More encouraging, however, is that Facebook has gained 258% since its IPO. And so far there haven't been any technical glitches in the rollout of Snap's IPO.

SEE ALSO: Snapchat is making its big stock market debut — and its 20-something founders are now multibillionaires

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Snapchat just filed its paperwork to go public. And its 26-year-old CEO isn't the only one who's about to get paid.

Lightspeed Ventures was the first venture capital firm to invest in Snapchat, and it owns a meaningful chunk of the company worth about $2 billion. 

Lightspeed found the startup thanks to one of its partners, Jeremy Liew. And in March 2012, Liew's Facebook profile picture was of himself and US President Barack Obama.

He didn't know it at the time, but that picture would help him land a crucial early stage investment.

When Liew first found Snapchat, the disappearing photo app had fewer than 100,000 installs. Liew's VC partner, Barry Eggers, had seen it on his teenage daughter's phone. She told her father there were only three apps high school kids were using: Angry Birds, Instagram, and Snapchat. Liew was familiar with the first two. But he had never heard of Snapchat.

The comment was enough to pique Liew's curiosity. He made it his mission to find out who was behind the mysterious app.

Liew did a Google search and came up dry. No articles had been written about Snapchat. There was no contact information on the startup's website except for a generic email address. Liew messaged it and heard nothing back. Liew looked up the company on LinkedIn and sent a message.

Again, there was no response. 

Determined, Liew did a WhoIs lookup on the domain name, Snapchat.com. It had been registered by Toyopa Group, the former parent company of Snapchat. Spiegel had named it after the street his father lived on, Toyopa Drive.

Liew did a Google search for Toyopa Group and found Evan Spiegel's name. He was a student at Stanford, where Liew had also gone to school. Liew was able to message him on Facebook through the Stanford alumni network.

When Liew sent the Facebook message, Spiegel finally replied. He wasn't looking to raise a round of financing; Liew was fine with that. Liew invited Spiegel to meet him at his office on the most famous street in the entrepreneurial world, Sand Hill Road in Menlo Park.  A few feet to the left sits Greylock Partners, Sequoia Capital and Institutional Venture Partners. To the right sits Khosla Ventures.

During the meeting, Spiegel shared his vision for Snapchat. Facebook, he said, was a place where you could share superficial feelings with the world. It was for sharing times when you were happy, confident, and enjoying life. But what about all the other times when you were sad, feeling crazy or even depressed?

Spiegel felt there should be a place where intimate feelings could be expressed privately via fleeting messages.  After all, true friendships are formed when people share both positive and negative experiences. And negative experiences can't be housed on a public, identifying platform like Facebook.

Spiegel's app hadn't been downloaded many times, but engagement metrics were strong. "People were using it like crazy and staying for a really long time," Liew recalls.

Eventually, ten days after meeting Spiegel and his cofounder Bobby Murphy, Lightspeed invest in Snapchat. It was the only investor in a $485,000 seed round, which Spiegel raised in May 2012. He was still three classes shy of graduating. On Thursday morning, his company went public a a $24 billion valuation. 

Liew later asked Spiegel why he returned the Facebook request and none of his other messages.

"It was because you had President Obama in your profile picture," Spiegel said. 

"There's serendipity involved in all this stuff," Liew said.

SEE ALSO: Here's who's going to get rich from the Snapchat IPO

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Shares of Snap Inc. got slapped with a "sell" rating as they made their trading debut. 

The parent company of Snapchat opened up at $24, up 41% from the initial public offering price of $17 per share. It was a solid start for the first social-media IPO since Twitter went public.

But Brian Wieser, an analyst at Pivotal Research Group, placed a price target of $10 on the stock, or 58% lower than its opening price. 

"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," Wieser said in a note on Thursday.

"It has a promising and innovative advertising offering, but so far it is still mostly unproven and difficult to quantify its ultimate scale. Investors will also be exposed to a novel corporate structure operated by a senior management team lacking experience transforming a successful new product into a successful company. High expenses and cash costs to run the company are negative as well."

Wieser was also concerned about the dilution that would happen when Snap issues more shares to its employees. 

One thing the app has going for it, Wieser said, is the size of its audience relative to individual TV properties like MTV and Comedy Central, which also skew young. 

It would be tough to outdo the competition for advertisers' wallets, with Facebook and Google poised to get a "first look" and a disproportionate share of revenues, Wieser said. He compared their "duopoly" to the big broadcast networks who are best suited to meet advertisers' needs compared to their smaller rivals. 

Unlike television, the advertising platform Snapchat offers is new and could require companies to hire external talent to develop their campaigns. The extra costs and creative process may be a deterrent, he said.  

Wieser also noted that Snap has said its user growth has recently slowed around the world. There's no certainty, he added, that a larger audience would automatically attract the business it needs to meet shareholders' expectations. 

Snap is "significantly overvalued given the likely scale of its long-term opportunity and the risks associated with executing against that opportunity," Wieser said. 

SEE ALSO: Snap surges in its stock market debut — after an IPO that made its 20-something founders multibillionaires

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Snap, the owner of the popular photo and social media app Snapchat, had its big IPO Thursday night, with shares going for $17 apiece. That gave the company a $23.8 billion valuation, even though Snap has never turned a profit and even stated in its IPO filing that it might never be profitable.

By at least one measure, Snap had a more expensive IPO than several other big recent tech IPOs, according to Fortune's Lucinda Shen.

Because Snap has never been profitable, Shen looked at the price-to-revenue ratio for Snap and several of its peers, rather than the more conventional price-to-earnings ratio normally used when valuing a stock.

Snap's IPO valuation of $23.8 billion and 2016 revenue of $404.5 million gives a ratio of 58.8. Shen noted that Snap's price-to-revenue ratio was much higher than those of a lot of other big tech companies at the time of their IPOs.

The closest ratio, according to Shen, was Twitter's, with the social media company's IPO valuation being 44.8 times its revenue.

Check out Fortune's analysis here.

SEE ALSO: This throwback to Facebook's IPO is one reason why some investors are nervous about Snapchat

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Snap, parent company of ephemeral photo-sharing app Snapchat, has reportedly worked on building a drone, according to The New York Times.

While the details of what the company has worked on are unclear, it could be planning a drone for consumer sale as its second-ever piece of hardware, after its Spectacles offering.

But unlike Spectacles, which proved fairly popular among consumers, a potential Snap drone could struggle to find traction. Manufacturing drones is a highly specialized process that requires a wealth of engineering and resources — which is why the prominent players in the space primarily manufacture drones and do little else. This means that companies attempting to manufacture drones as an addition to their core business often struggle in the market. A good example of this is GoPro, which released the Karma drone last year but ultimately had to recall it following technical and safety concerns. If it were to release a drone, Snap would likely to run into similar challenges.

Drones turned the corner in 2015 to become a popular consumer device, while a framework for regulation that legitimizes drones in the US began to take shape. Technological and regulatory barriers still exist to further drone adoption.

Drone manufacturers and software providers are quickly developing technologies like geo-fencing and collision avoidance that will make flying drones safer. The accelerating pace of drone adoption is also pushing governments to create new regulations that balance safety and innovation.

Safer technology and better regulation will open up new applications for drones in the commercial sector, including drone delivery programs like Amazon’s Prime Air and Google’s Project Wing initiatives.

BI Intelligence, Business Insider's premium research service, has compiled a detailed drones report that forecasts sales revenues for consumer, enterprise, and military drones. It also projects the growth of drone shipments for consumers and enterprises.

The report details several of world’s major drone suppliers and examines trends in drone adoption among several leading industries. Finally, it examines the regulatory landscape in several markets and explains how technologies like obstacle avoidance and drone-to-drone communications will impact drone adoption.

Here are some of the key takeaways from the report:

• We project revenues from drones sales to top $12 billion in 2021, up from just over $8 billion last year.
• Shipments of consumer drones will more than quadruple over the next five years, fueled by increasing price competition and new technologies that make flying drones easier for beginners.
• Growth in the enterprise sector will outpace the consumer sector in both shipments and revenues as regulations open up new use cases in the US and EU, the two biggest potential markets for enterprise drones.
• Technologies like geo-fencing and collision avoidance will make flying drones safer and make regulators feel more comfortable with larger numbers of drones taking to the skies.
• Right now FAA regulations have limited commercial drones to a select few industries and applications like aerial surveying in the agriculture, mining, and oil and gas sectors.
• The military sector will continue to lead all other sectors in drone spending during our forecast period thanks to the high cost of military drones and the growing number of countries seeking to acquire them.

In full, the report:

• Compares drone adoption across the consumer, enterprise, and government sectors.
• Breaks down drone regulations across several key markets and explains how they’ve impacted adoption.
• Discusses popular use cases for drones in the enterprise sector, as well as nascent use case that are on the rise.
• Analyzes how different drone manufacturers are trying to differentiate their offerings with better hardware and software components.
• Explains how drone manufacturers are quickly enabling autonomous flight in their products that will be a major boon for drone adoption.

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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the world of drones.

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Snap Inc's pop in its trading debut Thursday made the company larger than many established corporations. 

Based on the opening price of $24, the Snapchat parent's market capitalization — the total value of its outstanding shares — rose to $33 billion. 

Also, Snap had a more expensive IPO than several other big recent tech IPOs, judging by the value of each dollar of revenue, or the so-called price-to-revenue ratio. 

Early investors are betting that the company will be able to increase user engagement with its transient-messaging app, and lure advertisers who can choose Facebook or Instagram instead.

However, Snap is not yet profitable, and there are questions about whether its valuation is justified. None of the three analysts who had ratings on the stock on its first day advised investors to buy.

"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," said Brian Wieser, an analyst at Pivotal Research, in a note. 

The chart below shows 17 of the companies Snap became more valuable than on its first day based on market cap.

SEE ALSO: Snapchat already has a 'sell' rating, and the analyst thinks it will crash 58%

DON'T MISS: Snap's IPO was much more expensive than those of other tech companies

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Snap Inc. surged in its debut as a publicly traded company Thursday, after raising a greater than expected $3.4 billion in an initial public offering.

Shares of Snapchat's parent company opened for trading at $24, up about 41% from the IPO price of $17 apiece. At the opening price, Snap had a valuation of about $33 billion.

The stock closed at $24.48, up 44%.

Snap's cofounders, Evan Spiegel, 26, and Robert Murphy, 28, rang the opening bell on the exchange earlier Thursday. At the IPO price, Spiegel's stake in the company is worth at least $4.5 billion. Murphy's stake in Snap is valued at closer to $3.9 billion.

The shares opened for trading at 11:19 a.m. after a period of "price discovery" during which traders on the floor of the exchange try to corral demand for the stock. Speaking on the floor of the exchange, Glenn Carell, director of NYSE floor operations for Global Trading Systems, said the price discovery took a long time because of heavy demand from buyers who didn't get allocations they wanted in the IPO itself. Carell expects the stock to end its first day of trading around $24 or $25 a share.

Snap's is the first tech IPO of the year, the first offering from a social network since Twitter went public, and the largest tech deal since Alibaba went public in 2014.

It is going public at an opportune time. Stock benchmarks hit record highs on Wednesday, with the Dow Jones Industrial Average closing above the 21,000 mark for the first time.

Since it was launched in 2011, Snapchat has matured from a "sexting app" to one that still deletes messages by default, but is a viable competitor to companies like Facebook and Twitter.

According to its IPO prospectus, it posted a net loss of $514.6 million in 2016 and warned that it may never be able to achieve or maintain profitability. It earned $404.4 million in revenue in 2016, up from $58.6 million in 2015.

Snap is "significantly overvalued given the likely scale of its long-term opportunity and the risks associated with executing against that opportunity," said Brian Wieser, an analyst at Pivotal Research Group, in a note on Thursday. He rated the stock a "sell" with a $10 price target. 

During the roadshow, investors raised questions about the slowdown in the rate of active users, and how much potential Snapchat has as an advertising platform. Snap said its biggest revenue opportunity is the growing budget for worldwide mobile advertising, which could reach $196 billion by 2020 from $66 billion now.

"Snapchat’s slowing user growth ultimately caps its long-term revenue opportunity," said Anthony DiClemente, a Nomura analyst who sees 6% downside to the stock, in a note.

Snap's stock is listed under the ticker SNAP. The shares offered to investors will have no voting rights.

Portia Crowe contributed reporting. 

SEE ALSO: Here's what you need to know about Snapchat's IPO

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NOW WATCH: The fabulous and charmed life of 26-year-old self-made billionaire, Snap CEO Evan Spiegel

NEW YORK — Cheers erupted from the floor of the New York Stock Exchange on Thursday as cofounders Evan Spiegel and Bobby Murphy rang the opening bell to announce Snap's hotly anticipated IPO.

The Snapchat maker's debut is the first tech IPO of the year and the largest tech deal since Alibaba went public in 2014.

Snap had priced its IPO at $17 per share, but demand pushed the opening price to $24 at a $33 billion valuation.

Snap's share price closed at $24.48 on its first day of trading, a 44% increase from its original IPO price.

On the floor of the exchange, Snap executives and early employees clapped, took selfies, and hugged each other.

Back at the company's Los Angeles headquarters, employees celebrated the IPO with doughnuts and champagne.

"Right now we're just celebrating," Snap's chief financial officer, Drew Vollero, told Business Insider after the stock began trading on Thursday.

Here's what it was like inside Snap's blockbuster IPO.

SEE ALSO: Meet the power players who help Evan Spiegel run Snap Inc.

A giant Snap Inc. banner adorned the the New York Stock Exchange on Thursday, signaling the company's hotly anticipated IPO.

Snap signage was everywhere inside the exchange floor.

Company execs and early employees were given a roped-off area up front to watch cofounders Evan Spiegel and Bobby Murphy ring the opening bell.

LOS ANGELES — As shares of California-based Snap Inc began trading on the New York Stock Exchange on Thursday, two dozen residents of the company's adopted home of Venice Beach protested outside its offices, accusing the growing tech company of spoiling their seaside community.

Their chief complaint is that the maker of the popular mobile messaging app Snapchat is turning the stylishly funky beachfront neighborhood of Los Angeles into an office park, driving up real estate prices and displacing working-class residents.

"I'm here because Snapchat has been growing like an cancer here," Bradford Eckhart, 47, a 20-year resident, said as demonstrators carried signs with slogans such as "Snaprat,""StopSnap" and "Venice Beach is not for sale."

"They are really affecting the heart of this community. If they stayed just in the office buildings it would be OK, but they're not," he added.

Snap, part of the so-called Silicon Beach movement that has seen high-tech firms flocking to Southern California's coast, occupied a single seaside bungalow at its inception four years ago but has since expanded to multiple properties within Venice and adjacent Marina del Rey.

The protesters accuse Snap of buying up whole blocks of real estate and illegally using many properties zoned for residential use as office space. Locals also have complained that Snap's private security service often blocks off public streets.

"I would rather see them get a campus," said Venice Beach resident Barbara Londale, 36. According to her, Snap has purchased 30 properties up against the Venice beachfront sidewalk that harbors various eateries, bars, shops and the neighborhood's famous bohemian stretch of outdoor vendors.

The company issued a statement on Thursday insisting that it has worked "closely with local schools and nonprofits to be a good neighbor."

"We don't just have our headquarters here; many of us also call Venice home," Snap spokesman Kevin Galvin said. "No one could have anticipated how quickly we've grown, and we have already begun focusing our future growth outside of Venice."

Snap raised $3.4 billion in its initial public offering on Wednesday and its shares popped up 44 percent on the first day of trading on Thursday, giving the company a market value of more than $28 billion. (Editing by Steve Gorman and Bill Rigby)

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NBCUniversal invested a whopping $500 million in the initial public offering of Snapchat's parent company, Snap Inc., as "part of a strategic investment and partnership,"CNBC's Andrew Ross Sorkin first reported Friday. Business Insider independently confirmed that figure.

After Snap's stock popped 44% on day one, that stake is worth about $720 million, a cool $220 million up. Not bad for a single day.

As Sorkin noted, NBC appears to be the only media company with a strategic stake in Snap so far — the other strategic investors are the tech companies Alibaba and Tencent.

But it certainly isn't NBC's only big strategic investment in digital media. In a note to employees that was obtained by Recode's Peter Kafka, NBCUniversal CEO Steve Burke said the Snap investment fit into a $1.5 billion push into digital businesses. The company invested in BuzzFeed for the second time late last year, bringing its total to $400 million in the company, and it has put $200 million in Vox.

NBC courted Snap CEO Evan Spiegel "for the past year,"CNBC reported. The companies also worked together (with BuzzFeed as well) on the Olympics, which snagged a massive 2 billion Snapchat views.

"Evan Spiegel and his talented team have done an outstanding job building Snap into an extremely innovative and relevant company, attracting a massive, dedicated and young audience,"Burke wrote.

NBC has agreed to hold the shares for at least a year, according to CNBC.

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Life is good for Evan Spiegel.

His company, Snap Inc., went public on Thursday at a $33 billion valuation. And with a net worth of at least $5 billion, 26-year-old Spiegel is one of the youngest billionaires in the world.

He lives a charmed life and he knows it.

"I am a young, white, educated male," the Snapchat creator once said at a Stanford business conference. "I got really, really lucky. And life isn't fair."

We've pulled the highlights of Spiegel's spectacular life and career from profiles by LA Weekly, Forbes, Business Insider, court documents, and more.

SEE ALSO: 'Right now we're just celebrating': Inside Snap's crazy $33 billion IPO

Spiegel grew up in the Pacific Palisades, a ritzy Los Angeles enclave just east of Malibu. He is the older son of two Ivy League-educated lawyers. His parents divorced when he was in high school.

When Spiegel turned 16 and got his driver's license, he was given a Cadillac Escalade, which he parked in the gated Southern California Edison parking lot next to his school. Spiegel's father represented Edison during the energy crisis.

Source: LA Weekly

Spiegel spent his early years at an ultra-exclusive school called Crossroads in Santa Monica, which costs tens of thousands per academic year. Other notable alumni include Tinder cofounder Sean Rad, Kate Hudson, Jonah Hill, Jack Black, and Gwyneth Paltrow.

Snap Inc's shares rose by as much as 17% in trading on Friday, extending their gains a day after they became available to the public. 

The parent company of Snapchat jumped 44% Thursday after the initial public offering that raised a greater than expected $3.4 billion. The shares opened for trading at $24, higher than the IPO price of $17. 

It was the first tech IPO of the year and the largest tech deal since Alibaba went public in 2014.

Based on the opening price on Thursday, Snap had a market cap of about $33 billion, greater than corporate giants like Macy's and American Airlines, and about $22 billion more than Twitter, a competitor.

Early investors are betting on the potential of Snap's advertising platform and the company's ability to grow the number of active users, amid questions about valuation and a recent slowdown in user adoption. 

"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," said Brian Wieser, an analyst at Pivotal Research, in a note on Thursday. He rated the stock a "sell" with a $10 price target. 

SEE ALSO: NBC just made over $200 million from Snapchat in a single day

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Snap continued to rally Friday after staging the largest public debut of the year on Thursday. 

In its first two trading sessions, the Snapchat parent gained as much as 69% above its IPO price of $17. 

Meanwhile, analysts and investors continue to question whether the company is overvalued, and how much ad-revenue share it will be able to steal from digital giants like Facebook and Google. 

The enthusiasm around Snap could sustain for at least a few more weeks if the history of major IPOs repeats itself.

"Our composite path of the largest 20 IPOs shown below projects a peak 38 trading days (two months) after the first trade date on average followed by a substantial four-month decline," said Tom Leveroni and Shourui Tian of Nautilus Investment Research in a note. Their composite includes Goldman Sachs' 1999 debut, and Alibaba's offering in 2014.

They added that the issuing companies and investment banks have been quite good at selling near the market tops. 

"It’s well accepted that investors are overpaying for Snap based on expected sales and earnings, but it doesn’t seem to matter," said Jasper Lawler, senior market analyst at London Capital Group, in a note. "With such exuberance in the marketplace, Snap’s timing is impeccable."

Snap's surge in the past two days has created flashbacks of other large tech IPOs. Twitter opened at $45.10, 73% above its initial offering price in November 2013. It peaked two months later before dropping below its IPO price. Investors who bought at the debut and haven't sold are down 62% amid slow user adoption and executive departures from Twitter. 

Conversely, Facebook fell below its offering price the day after it went public in May 2012. However, it's up 257% from its debut. 

Interest in Snap's shares could remain high amid media coverage and more investor demand, said Ihor Dusaniwsky, head of research at S3 Partners. But short interest — a gauge of whether investors think the stock price will fall — is likely to increase, too. 

"We expect that 10% to 20% of the initial offering will be shorted in the first week of trading, which roughly translates into $500 million to $1 billion of short interest right from the start," Dusaniwsky said. 

SEE ALSO: Snap surges 44% in its stock market debut — after an IPO that made its 20-something founders multibillionaires

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Snap made its long-awaited public trading debut on Thursday, and, for a company that isn’t sure when it’ll be profitable, didn’t flop at all. The Snapchat maker saw its shares jump from an IPO price of $17 to more than $24 by the end of the day, a 44% leap that made the it more valuable than the likes of Target, Kellogg, and CBS. It continued to rally on Friday.

So what does all of this mean for Snap’s long-term prospects? Well, as this chart from Statista shows, not too much. While some eventual tech giants have had huge openings, others have opened to less fanfare. Notably, Twitter’s 72% pop didn't quite lead to a healthy business, while Facebook’s shaky first day didn't stopped it from carving a path of destruction.

Snap has entered into a hungry market, but to justify its hot start, it will still have to prove it can keep the users and revenue flowing in — and that it can stop Facebook from cutting it off at the knees.

SEE ALSO: People are holding onto their smartphones longer

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As Snap Inc. was preparing to take its shares public on Thursday, March 2, another company with a similar name was jumping.

Snap Interactive, the owner of dating and messaging apps including Tinychat and FirstMet, surged 18%. Its so-called over-the-counter shares — traded without a centralized exchange — quickly fell when the parent company of Snapchat started trading. 

That was not the first time that Snap Interactive's shares moved around major news announcements from Snap.

Its trading volume started rising in January after news of  Snap's plans to file and then jumped 164% in the four days after the regulatory filing made it official. 

It's not the first time that shares of one company have surged following news on a similarly named one. Tweeter, the bankrupt electronics retailer, saw its shares pop 685% when Twitter filed for its IPO in 2013. 

"I'm not convinced anybody confused anything," said Jason Katz, the chairman of Snap Interactive's board. He founded Paltalk, a video-chatting app that Snap Interactive acquired last November. 

Katz told Business Insider the company does not usually comment on its stock price. When asked about the timing of the stock's move and news from Snap, he cited a reverse stock split the company completed on January 5 as one catalyst.  

The reverse split, which divided each share by 35, helped raise the price of the stock and was responsible for the initial spike in January shown above. The reverse split was initiated, Katz said, partly to move Snap Interactive a step closer to being able to upgrade from a penny stock to a Nasdaq-listed stock.

"The names are similar — of course, I'm not going to dispute anybody who did come to us," Katz said. He added that the company had received phone calls from people who thought they were calling Snap. 

"Nobody now can be confused because they can buy Snapchat," Katz said. "They're buying the symbol SNAP." Katz's Snap Interactive trades under the ticker STVI.

Snap Interactive has no immediate plans to change its name. "We're the ones who have had the name for 10 years," Katz said. 

SEE ALSO: Snapchat already has a 'sell' rating, and the analyst thinks it will crash 58%

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New York University professor Adam Alter, author of Irresistible: The Rise of Addictive Technology and the Business of Keeping Us Hooked, explains how you can tell if you're addicted to Facebook, Instagram or any other form of social media. Following is a transcript of the video.

One way to think about the difference between addictive use and non addictive use is what the effect is of that use on your life. If you do something a lot and it makes you less well off, it hampers your social well-being, maybe it makes you sedentary so you’re not as physically well. Maybe it changes how well you do at work because you’ve got too much time spent distracted, then that is something that has the potential to become an addiction.

We know that people spend a lot of time, even when they’re not engaged with social media, thinking about social media. So there’s evidence for example that if two people are having a conversation in a room and there’s an iPhone turned upside down on a table nearby, the quality of the connection they form will be diminished just because there’s a phone there.

Withdrawal symptoms differ for different people, but the main thing that happens I think is preoccupation. You spend a lot of your time thinking about the thing that you can’t do. You need to become what’s called a behavioral architect. You basically have to design your environment the same way that someone who designs buildings or cities designs those things. And what that means is trying to work out how you can tweak features of the environment to prevent this addiction or these addictions from taking hold.

For most people what that means is you need a certain period of the day, whether it’s at work or at home, that you designate as screen or tech free. You need to enact these decisions because we’re very bad at resisting temptation. We’re much better at removing the temptation in the first place.

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CEO Evan Spiegel is the public face of Snapchat parent company Snap Inc., but Bobby Murphy also wields considerable power as its cofounder and chief technology officer.

Together, Murphy and Spiegel own the vast majority of Snap's voting stock, giving them complete control over the company's future. Now that Snap has gone public, Murphy has an estimated net worth of around $5.4 billion.

Unlike Spiegel, Murphy has maintained a decidedly low profile since the beginning of the company. He's only given a handful of interviews, and little is known about his personal life.

People who've worked with Murphy describe the 28-year-old as smart, friendly, and quiet.

"I'd describe him almost like a monk," Snapchat's first hire, David Kravitz, told Forbes in 2014. "I don't think I've ever seen him upset."

We've pulled the highlights of Murphy's life and career from interviews he's given over the years and Business Insider's own reporting:

SEE ALSO: The fabulous life and career of Snap CEO Evan Spiegel

Murphy, whose full name is Robert Cornelius Murphy, was born in Berkeley, California in 1988. His mother immigrated from the Philippines to the US, and both of his parents had government jobs.

He spent his elementary years at the School of the Madeleine, a private Catholic school in Berkeley. He then went on to attend Saint Mary's College High School, another private Catholic school in the area.

Murphy met Spiegel while studying at Stanford, where the two lived across the hall from each other and were both members of the Kappa Sigma fraternity. Murphy studied mathematical and computational science, while Spiegel studied product design.

Snapchat's beginning sounds a lot like Facebook's from "The Social Network."

In Snapchat's case, it wasn't two ousted cofounders (the Winklevoss twins) against Mark Zuckerberg. But still, it featured the backdrop of an elite university — Stanford versus Harvard — and ended up in litigation, with Snapchat cofounders Evan Spiegel and Bobby Murphy against Reggie Brown.

At stake was the founding story of a social network to make photos disappear. Snapchat's founders ended up paying $157.5 million to settle the case.

Snapchat survived its rocky starts to make its debut on Wall Street, where it closed on Friday with a $31 billion market cap.

Here's how Snapchat went from a million-dollar idea about disappearing photos to the giant social media company called Snap today:

SEE ALSO: 33 photos of Facebook's rise from a Harvard dorm room to world domination

Like many other startups, ground zero for Snapchat's story is Stanford University, where a young Evan Spiegel from Los Angeles befriended Reginald (Reggie) Brown. The pair decided to join Kappa Sigma fraternity — where they would meet Snapchat cofounder Bobby Murphy — although it would be a few years before they turned the idea of disappearing photos into a business.

Snapchat wasn't Spiegel's first startup. Murphy had recruited Spiegel, a Kappa Sig brother one year younger than him, to help with an idea he had about a social network. In 2010, they then launched FutureFreshman, a site meant to make applying to college easier. It never really took off, but Spiegel had caught the entrepreneurial bug.

It wasn't until Spiegel's junior year that the idea for Snapchat was born. "I wish these photos I am sending this girl would disappear," Brown told Spiegel in April 2011. His friend immediately got excited about the concept of disappearing photos and told Brown that this was a million-dollar idea. Five years later, that idea would now be worth billions.

Investors are going crazy for Snapchat parent company Snap, and the stock is up more than 50% since its Thursday IPO, with a market cap of more than $30 billion. 

But Snap is still losing a ton of money — to the tune of $514 million in 2016.

So how is Snap telling its investors it can make money, eventually?

Indications are that Snap doesn't expect to gain the gargantuan scale of Facebook, but rather create a premium product to wring out more money per user.

One big way Snap thinks it can do this is by grabbing TV ad budgets, a shared goal with digital giants like YouTube and Facebook. This money has been slow to move from TV to digital video, but Snap thinks it's in the best position when that accelerates.

That's because Snap considers Snapchat ads already superior to those on television, and way better ads than other digital video competitors, according to the Snap S-1 filing. We previously looked at Snap's argument for why that is, and in the wake of the IPO frenzy, it's a good time to revisit it.

The competition is lacking

In the S-1 filing, Snap tells the story of how it set out to create an "engaging, creative, and fun" ad format for its mobile app.

First, Snap looked at its digital-video competitors and concluded that the existing video ad options were horrible. Here's how the company described it:

"Two of the most popular forms of digital video advertising at the time were pre-roll horizontal video advertisements and in-feed horizontal video advertisements. Pre-roll advertisements played before the content that a user wanted to watch, leaving users feeling like they had been blocked by an advertisement and frustrated that they had to wait to see what they had selected to watch. In-feed advertisements were less obstructive, but they weren't full screen and users often scrolled right past them — just like a banner advertisement on a website."

So the two dominant forms were lacking, according to Snap. But the company found some light in TV ads, which its community of users enjoyed the most "because it was part of the experience, especially when the advertisements were funny, creative, and entertaining"— which sounds suspiciously similar to the ad product Snap wanted to create.

TV, but for teens

TV is where Snap saw an opening.

The demographic that loves Snapchat is also the demographic that is watching less TV, according to Snap — so if the company could recreate TV ads on mobile, it could score big.

"We wanted to figure out how to capture the entertainment and creativity of television advertisements," Snap wrote.

However, Snap made a few changes from TV ads. First, the ads were "vertical video," meant to be viewed when holding your phone vertically. Second, they were skippable to give users the choice of whether to watch them. (To be fair, YouTube pioneered skippable online video ads years ago with its TrueView ad format.)

Like TV, Snapchat showed ads only when users chose to watch a series of videos with sound — a "Story." Ads appeared amid the videos, except in Snapchat you could skip them.

Snap declared its ad product, with this formula, "as good as television."

Swiping and targeting

But Snap wanted to make its ads better than TV by "using some of the unique features of smartphones and Snapchat." 

In the S-1, Snap went over the two main ways it thinks its ads improved on the TV experience:

• Swiping up."For example, a user who views a Snap ad about a new product can swipe up on the Snap ad to buy the product instantly from the advertiser's website without leaving the Snapchat application."
• Targeting. Snap takes context into account to serve up the ad most relevant to the user.

And there you have it: Snap's thesis for why Snapchat video ads are not only better than those in other mobile competitors, but also better than those on TV.

Hello, TV

There's a good reason Snap, in its S-1, compared its ads with TV ads.

TV ad budgets have been slow to follow video consumption on your smartphone, and there's still a huge pool of money floating around — over $70 billion in ad spending on TV in the US alone, according to eMarketer.

Snap thinks those TV ad dollars are ripe for the taking.

"Worldwide advertising spend is expected to grow from $652 billion in 2016 to $767 billion in 2020," Snap wrote. "The fastest-growing segment is mobile advertising, which is expected to grow nearly 3x from $66 billion in 2016 to $196 billion in 2020. We believe that one of the major factors driving this growth is the shift of people's attention from their televisions to their mobile phones."

If ad budgets move away from TV and toward mobile phones, it makes sense those new dollars would gravitate toward something that feels more like old-school TV. Snap's pitch is that its ads are like TV, only improved.

Advertisers aren't jumping on the Snap bandwagon just yet — the company's revenue in 2016 was $400 million, although Snap is still in the early stages of ramping up its video ad business.

And Snap certainly isn't the only tech company going for these budgets. Facebook's latest quarterly earnings call focused on how its video product was about to get better, specifically more "premium" and more episodic. Sound familiar?  

What remains to be seen is whether TV advertisers will buy it — either from Snap, Facebook, YouTube, or anyone trying to convince them that this is the generation of mobile products that finally make sense for them.

SEE ALSO: Here are the strengths and weaknesses of Facebook's plan to grab TV's ad money

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Snap Inc. is having its first down day in the stock market since going public on Thursday.

Shares of the parent company of Snapchat fell 7% in early trading on Monday to as low as $24.85. They were about 14% lower than their high after the initial public offering.

It's still very early days for the stock, which may test some early investors' patience if it quickly falls below the opening price of $24 a share, effectively erasing gains for those who bought as the stock went public. The IPO priced at $17 a share. 

Even though there was huge demand for Snap's shares, making it the largest tech IPO since Alibaba in 2014, none of the seven analysts who cover Snap rate it a "Buy." Analysts who advise investors to sell are warning about strong competition from Facebook and Twitter and slow user growth.

Over the weekend, Barron's magazine said the company's shares could be cut in half.

The broader stock market was also lower Monday; the tech-heavy Nasdaq was down 0.7%, or 41 points.

SEE ALSO: Investors love Snapchat, but Wall Street analysts won't give it a single 'buy' rating

DON'T MISS: We spoke to the chairman of the company whose stock exploded after people confused it with Snapchat — here's what he said

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