Surprisingly Snap Earns $24 billion-Valuation on Wall Street Debut to Smash Facebook Record

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The owner of the messaging app Snapchat, Snap INC erased the doubts about the company's slumping user growth as it managed to pull off a strong performance in its opening day on Wall Street.  Snap shares finished in the green zone with a near 50% gain amounting to $24 billion, to snatch the record from Facebook as the biggest debut at the New York Stock Exchange.

Shares of Snap was initially valued by the company at $17 billion but as investors flocked to the hottest tech stock in Wall Street, it traded as much as 53%, hitting an intraday high of $26.05. But it pared some gains at the close and settled with a 44% gain at $24.48 market valuation, raising $3.4 billion from 200 million shares.

This surprising debut by Snap, which has been the target of criticisms regarding the huge loss incurred by the company last year, was more than twice of tech rival Twitter and ended up as the most richly valued stock in Wall Street on tech IPO since Facebook's debut. In May 2012, the popular social media site, Facebook, took the stock market by storm with an 11% opening day gain at $16 billion.

The pop on Snap shares brought up an argument to some analysts, saying that the company was overvalued. Brian Wieser, an analyst at Pivotal Research gave Snap shares a "sell" rating as he believed that the long term opportunity and the risks associated with that opportunity made it significantly overvalued in Wall Street.

Snap's reputation has been on acid test since late last year as the firm widened its net losses and its number of users kept plunging due to intense competition from big rivals such as Facebook and Instagram. Snap, Facebook, and Instagram have captured the charm of smartphone users for their photos and videos app.

But investors in Wall Street are keeping their hopes alive towards Snap shares as the tech giant contains innovative features such as the lenses function, which sets it apart from competing messaging apps. Furthermore, it braces for future innovations in its cameras and social platform to save the company from major losses.