Snap Shares Rally on Day After IPO With NBCU Disclosing Investment

Company's $30-plus billion market cap makes it worth more than Twitter, Dish Network, CBS, Viacom, Discovery

Snap Inc., the owner of Snapchat, continued its bull run on Friday, with the stock climbing as much as 20% after Comcast’s NBCUniversal said it had invested $500 million in the company.

Shares of Snap reached a high of $29.44 in morning trading after the NBCU investment news, before settling down to around $27 per share by midday. That’s still up more than 10% from the closing price Thursday, after Snap’s boffo initial public offering in which the stock ended up 44% for the day.

[UPDATE, 4:15 p.m. ET: The stock closed at $27.09 per share Friday, up 10.7% for the day, yielding a market cap of $31.35 billion.]

The company — which posted a net loss of $515 million for 2016 — has a market cap of more than $30 billion, making it currently worth more than Twitter, Dish Network, CBS, Viacom, Discovery Communications or American Airlines. Snapchat, the vanishing-message and media app popular among teens and young adults, had 158 million daily active users on average in Q4 2016 although its sequential quarterly growth slowed last year.

NBCU CEO Steve Burke, in a memo to employees Friday that was distributed to media outlets, positioned the strategic investment in Snap as part of its overall strategy to drive digital revenue. That has included investing $400 million in BuzzFeed and $200 million in Vox Media.

NBCU struck a partnership with Snapchat last year, under which it has produced several original series keying off “The Tonight Show Starring Jimmy Fallon,” “The Voice,” “Saturday Night Live” and E! News’ “The Rundown.”

“We expect to launch even more Snapchat shows with additional NBCU brands in the coming weeks,” Burke wrote in the memo.

According to CNBC, which first reported the NBCU investment in Snap, the media conglomerate has agreed to retain its stock for at least one year following the IPO.

Snap is banking on deals with NBCU and others to drive up ad revenue from Snapchat Discover, the short-form media section of its app. In its prospectus, Snap said it paid content partners $58 million in 2016 under ad-revenue sharing pacts, up from $9.6 million in 2015.

In the weeks leading up to Thursday’s IPO, Snap announced a string of deals with media companies including DiscoveryA+E NetworksBBC Worldwide, the New York Times and Time Inc. Snapchat also is producing shows with Turner and ABC (including an aftershow for “The Bachelor”).

Evan Spiegel, Snap’s 26-year-old CEO, sold 16 million shares in the IPO, according to company SEC filings, garnering $272 million through the sale. CTO Bobby Murphy — who along with Spiegel control all shareholder voting rights in Snap — also sold 16 million shares. The two execs still own 211 million shares apiece, giving them each 44.4% of shareholder voting power, which are worth more than $5.5 billion at the current share price.

Popular on Variety

More Digital

  • Apple TV Plus

    Apple TV Plus Will Cost $9.99 per Month, to Launch in November (Report)

    Apple is reportedly looking to launch the Apple TV Plus subscription-video service in November — around when Disney Plus is set to debut — for $9.99 per month. Apple TV Plus will bow in November with a “small selection” of shows, Bloomberg reported, citing anonymous sources. At $9.99, which analysts have guessed would be the [...]

  • netflix latest section

    Netflix Adds Upcoming Titles Section to Its TV App (EXCLUSIVE)

    Netflix is making it easier to keep track of all of its new releases: The company is adding a new “Latest” section to its TV app that includes both listings of newly released titles, as well as movies and TV show seasons that will be released this week and the week after. Upcoming titles are [...]

  • iQIYI headquarters building in Beijing

    Chinese Streamer iQIYI Squeezed by Changing Content Context

    Chinese video streaming giant iQIYI saw its losses deepen, in the April to June second quarter of its financial year. The company grew subscriptions, but was hit by rising content costs and lower advertising revenue Its parent company, Chinese search leader, Baidu saw its year on year profits drop, though it recovered from loss in [...]

  • westworld awakening art

    HBO Launches 'Westworld Awakening' VR Game With Survios

    Ever wanted to enter the world of “Westworld?” Now you can — except it won’t exactly be like you might have imagined it. Instead of being one of those guests living out their fantasies, you will be a host, slowly coming to grips with your life being an elaborate illusion. “Westworld Awakening” has been produced [...]

  • Spotify Announces Upgrades to Family Plan,

    Spotify Announces Upgrades to Family Plan, at No Charge in U.S. and U.K.

    Just days after reports emerged that Spotify is aiming to increase the price of its family plan in its home market of Scandinavia, the streaming giant announced an upgrade to the plan — with no price increase in the U.S. and U.K., where it remains at $14.99 and £15, respectively. A rep for the company [...]

  • Mike Vaughan

    Former Venmo COO Mike Vaughan Joins Stem's Board

    Los Angeles-based music distribution and payments startup Stem has appointed former Venmo executive Mike Vaughan to its board of directors. Vaughan was chief operating officer of Venmo from 2011 until earlier this year, and is now executive in residence at Oak HC/FT. “The music industry can benefit tremendously from innovation in the way money flows [...]

  • Streamy Awards

    Streamy Awards 2019 Return to YouTube for Exclusive Live-Stream

    The 9th Annual Streamy Awards will again be available to stream live on YouTube exclusively. The 2019 awards ceremony will take place at the Beverly Hilton in Beverly Hills on Friday, Dec. 13 and will stream live globally on YouTube via youtube.com/streamys. Videos from the 2018 Streamy Awards received over 6.9 million views on YouTube. [...]

More From Our Brands

Access exclusive content