Mar 2, 2017

Snap's IPO spectacle

Richard Drew / AP

As you've likely heard by now, Snap last night priced its IPO at $17 per share. That's above the proposed $14-$16 price range, which means that the Los Angeles-based "camera company" raised $3.4 billion at around a $24 billion valuation. For context, the 15 U.S.-based tech companies that went public in 2016 raised a total of just $1.44 billion (per Richard Peterson at S&P Global). Shares opened trading at $24.

Bull case: CNBC's Jim Cramer yesterday predicted that Snap stock will nearly double today, giving it a $40 billion market cap. But when I asked him if he'd buy at that price with a one-year lockup:

@danprimack no- I think the deal will be jacked up by too much retail enthusiasm AND big institutions trying to average up on ipo stake https://t.co/QYEXP8ZBCX— Jim Cramer (@jimcramer) March 1, 2017

Collateral beneficiary: Keep an eye on shares for Snap-On (NYSE: SNA) this morning, which could get boosted by sloppy day-traders. Kind of like what happened with a penny stock trading under FACE when Facebook went public.

Rival watch: Not only does Snap have to deal with competition from Instagram, but it also has a big Asia rival called Snow, which had been downloaded 100 million times through December, and has 40 to 50 million monthly active users. Here's more on Snow.

Pop pop: Finding the right IPO price for an oversubscribed offering like Snap can be tricky. On the one hand, companies want to raise every last dollar, since it helps to fund growth. On the other, negative aftermarket performance can weigh on a company's reputation with both potential customers and employees (something Facebook experienced after its troubled offering in 2012). There's also the unavoidable reality that if Snap shares soar or tank today, critics will slam the offering's bankers for being either dumb or greedy.

Key indicator: One big thing we still don't know is how many of Snap's IPO buyers are long-term investors. Reports earlier this week suggested that the company is asking investors for a one-year lock-up ― which is more than twice the lockup period for most of Snap's VC backers and vested employees ― which would be a big vote of confidence in a company that has yet to produce profits and whose growth is under attack by Facebook's Instagram.

Go deeper

Trump flags travel adversaries for New York, New Jersey, Connecticut

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios

President Trump said Saturday night the CDC would issue a "strong" travel advisory" for New York, New Jersey and Connecticut and that a "quarantine will not be necessary."

The big picture: With more than 121,000 people infected, the U.S. has the most COVID-19 cases in the world, exceeding China and Italy, per data from Johns Hopkins. A second wave of American cities, including Boston, Detroit, New Orleans and Philadelphia, are reporting influxes of cases.

Go deeperArrowUpdated 4 mins ago - Health

Trump rules out quarantine in New York, New Jersey, Connecticut after pushback

President Trump on the White House grounds on Saturdya. Photo: Sarah Silbiger/Getty Images

President Trump tweeted Saturday night that he's decided not to introduce quarantine enforcement measures fo New York, New Jersey and parts of Connecticut, but a "strong" travel advisory will be issued for those states.

Why it matters: The president said hours earlier he was considering the move to combat the rise in novel coronavirus cases. But he received pushback, most notably from New York Gov. Andrew Cuomo (D), who told CNN it would cause "chaos." "This would be a federal declaration of war on states," Cuomo added.

Go deeper: Updates on coronavirus in the U.S.

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 7:30 p.m. ET: 660,706 — Total deaths: 30,652 — Total recoveries: 139,304.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 7:30 p.m. ET: 121,478 — Total deaths: 2,026 — Total recoveries: 1,072.
  3. Federal government latest: President Trump is considering a quarantine on New York, parts of New Jersey and Connecticut.
  4. State updates: Alaska is latest state to issue a stay-at-home order — New York is trying to nearly triple its hospital capacity in less than a month and has moved its presidential primary to June 23. Some Midwestern swing voters that supported Trump's handling of the virus less than two weeks ago are now balking at his call for the U.S. to be "opened up" by Easter.
  5. World updates: In Spain, over 1,400 people were confirmed dead between Thursday to Saturday.
  6. 🚀 Space updates: OneWeb filed for bankruptcy amid the novel coronavirus pandemic.
  7. Hollywood: Tom Hanks and Rita Wilson have returned to U.S. after being treated for coronavirus.
  8. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  9. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.