Snap expects some IPO investors to make year-long commitments

A security guard helps hand out food from a food truck paid for by Snap

Snap Inc has priced its initial public offering above its target range on Wednesday, a source familiar with the situation said, raising $3.4 billion as investors set aside concerns about its lack of profits and voting rights for a piece of the hottest tech IPO in years.

IBD'S TAKE: Snap's trading debut Thursday will give regular investors a chance to get a piece of this fast-growing company.

Snap sold 200 million shares at $17 apiece, valuing the company at $23.6 billion.

Even more, according to Snap's public offering prospectus for the United States Securities and Exchange Commission, the company stated, "We believe that reinventing the camera represents our greatest opportunity to improve the way that people live and communicate".

Snap had 158 million daily active users as of the end of a year ago, but the company's user growth rate is slowing - and its losses are widening. Snap will be raising almost $2.5 billion in its IPO. Owners of class B stock are entitled to one vote per share, which can be converted into a share of class A stock. The company also said it is not "anticipating any material acquisitions" but may purchase some "complementary businesses, products or technologies".

Despite the challenges in converting "cool" into cash, Snap's valuation is the richest for a USA tech flotation since Facebook in 2012. He points to a huge user base of over 158 million daily active users who spend lots of time on the app.

The actual report, unfortunately, makes sure to remind us that "working on" does not equal "will release"; that is, while there's no reason to doubt that the company is thinking about making drones, nothing is yet guaranteed.

Spiegel's vision for the company remains somewhat mysterious.

Snap, which rebranded itself as a camera company a year ago, debuted video-camera sunglasses called "Spectacles" as its first product in November. Snapchat rebranded itself as Snap in September and calls itself a "camera company", indicating that its focus won't be confined to messaging.