Snapchat Prices Shares at $17, Bringing Company Valuation to $24 Billion

A security guard helps hand out food from a food truck paid for by Snap

After weeks of fervent speculation, Snapchat parent company Snap is set to price their initial public offering, topping expectations at $17 a share.

The company plans to raise somewhere around $3.4 Billion in its public offering. That's above the expected range of $14 to $16 and values the company at $24 billion.

Though mostly known for its app, Snap has made ventures into hardware before.

For Snap Inc., a social media company that started its official bid to go public last Halloween, the looming question now is whether investors are in for a trick or a treat.

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Snap had, however, promised almost 240 million shares to employees as of December 31, including 37 million - worth almost $600 million - as an IPO bonus for boss Evan Spiegel.

Whilst details surrounding the drone are very thin on the ground, it's highly likely that Snap would use the gadget to take photos or videos in order to enhance Snapchat's appeal. The pricing signals investors weren't scared away by Snap's slowing user growth in the second half of 2016, which can be attributed in part to competition from Inc., which recently cloned a core Snapchat feature in its app Instagram. According to three anonymous sources, the company is building a drone in an attempt to be "a modern-day camera company".

"We may also use a portion of the net proceeds to acquire complementary businesses, products, services, or technologies", Snap said in its filing. But the photo/video world is a tough sell when it comes to drones, so ultimately, it's the product that will determine the company's success. It will be the largest US company to go public since Facebook's much-larger IPO raised $16 billion in May 2012.

Snap's valuation has nearly tripled within three years, after Snapchat (its previous corporate trading name) held a funding round in 2014 that valued the company behind Snapchat at $10bn (£8.13bn). But history will likely remember Evan Spiegel and his precious company as the lost, desperate dreams of frat bros for generations to come.

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