Generation Z rushed to buy stock during the initial public offering of Snap Inc, the company formerly known as Snapchat, the very popular platform for exchanging photos, but the board at one high school in California decided to take a gamble as well, FOX News reports.
In 2012, the board at St Francis High School in Mountain View invested $15,000 in the company, and by last week’s huge IPO, that investment had returned $24 million.
In a letter to the school community, Simon Chiu, the school’s president, wrote, “The school’s investment in Snap—which this morning announced the completion of its IPO—has matured and given us a significant boost.” The $24 million payoff, which the school now controls, can buy lots of school supplies, I would imagine.
Mr Chiu wrote a little about what the school offers students in an unrelated post: “Each day at Saint Francis amazing and wonderful things happen in the classroom and around the campus. We are blessed with gifted and motivated students who daily amaze us with their accomplishments. Standing shoulder-to-shoulder with our students is the other part of our family, our faculty and staff, who inspire and encourage our students to follow their dreams. Whether in the classroom, on the athletic fields, directing the arts programs or moderating our clubs, our teachers challenge our students to do their best and support them in their dreams.”
Other young investors also bought stock in the company to beat the IPO. On paper, many of these teens and 20-somethings are now millionaires or even billionaires.
In particular, a 26-year-old Stanford University dropout named Evan Spiegel is richer than President Donald Trump, thanks to the IPO of the company he co-founded. Snap’s market value is estimated to be around $30 billion, and it’s the hottest stock anywhere right now. Part of its story, though, is about media hype and speculative mania, the Toronto Globe and Mail reports.
The company, as in many IPOs, only offered a portion of its shares to the public, the paper reported, and because of the exceedingly high demand—the stock price shot up 44 percent on the first day of the IPO—the company didn’t give its new shareholders any voting rights.
Many investment advisers, comparing this first tech IPO in 2017 with others in the past, see a “bubble” created, in part, by the presidency of Mr Trump.
“While Snapchat may have enjoyed the benefit of the doubt earned by its social predecessor, it also must deal with comparisons to Facebook—and deal with Facebook itself,” writes Kyle Woodley in US News & World Report. He points out that Snapchat lost $515 million last year but that Facebook may have already shown social media companies how to get around deficits like that and keep moving forward, even after the IPO.
Here’s where those voting rights may come into play. While the need to answer to investors drove Mark Zuckerberg at Facebook to start making a better profit, Snapchat’s founders may feel no such pressure to change things at the company, which faces growing competition from a rival platform known as Twitter.
Mr Trump, while creating a sort of market bubble, to be sure, has also thrown his presidential support behind Twitter. It remains to be seen what Snapchat can do about that, even as it makes its founders and other young investors rich during the IPO.