According to reports, Snapchat’s parent firm, Snap Inc(NYSE:SNAP) IPO not just raised close to $2.5 billion, but it is also grabbing around $1 billion for the company founders and early investors.
Snap Inc(NYSE:SNAP) reportedly revealed that it will sell 200 million stock for $17 each in the largest U.S. IPO since 2014. The company plans to sell 145 million of those stock, while its executives and early investors will take 55 million shares that they gathered before the IPO and take profits of $935 million home.
Reports said that both Snap Inc. (NYSE:SNAP) co-founders Evan Spiegel and Bobby Murphy, consider selling 16 million stock in the offering, bringing in about $272 million for each. Even after selling those shares, both co-founders will each own 210,970,819 shares, worth almost $3.6 billion at the IPO price, and will together hold above 88% of voting power in the firm. The company said all the investors who bought class A common stock in the IPO will not get the voting rights.
Moreover, on the offering close, Chief Executive Spiegel will get a limited stock unit award of 3% of all shares outstanding to be delivered quarterly over three years. This will make an extra $590 million.
Meanwhile chairman, Michael Lynton, considered selling 54,907 shares in the offering, bringing in $933,419. Lynton will still have possession of 2,964,733 shares after the offering, worth more than $50 million based on the offering price.
Snap (NYSE:SNAP) has filed to go public in what is anticipated to be the largest U.S.-listed tech IPO since 2014. But investors have apprehensions about its revenue model.
Chief Strategy Officer Imran Khan, Timothy Sehn, vice president of engineering at Snap (NYSE:SNAP) and board member Joanna Coles were among the high profile shareholders have opted to retain stock instead of selling it in the IPO.