You Probably Never Had a Chance with Snapchat Anyway

For Investors General March 13, 2017
Snap Chat Investors


You Probably Never Had a Chance with Snapchat Anyway

If you’re feeling down about missing out on Snapchat’s 44% single-day growth, find comfort in this sobering reality: You probably wouldn’t have gotten in at that price anyway.

That’s because most IPOs, Snap included, only allow certain investors to trade at the initial price. TechCrunch explains, “The IPO process favors large institutional investors and ultra-wealthy individuals who are on friendly terms with the banks. No one said it was democratic!”

Basically there’s a VIP line for “public investors” who get the super low price. In Snap’s case, they advertised the market price at $17 on Wednesday, and then opened at $24 on Thursday at 11:20AM. The precious hours between are reserved trading time for shareholders who carry a lot of cash or a lot of clout.

Imagine if we lived in a world in which ultra-wealthy individuals weren’t the only ones with the opportunity to make more money. Oh wait, we do on StartEngine!

Update: Snap Inc’s IPO gains disappear anyway.

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