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.
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