Snapchat founders, investors cash out nearly $1
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Posted On: 03/02/2017 5:08:05 PM
Snapchat founders, investors cash out nearly $1 billion in Snap IPO
Snap Inc.’s initial public offering raised nearly $2.5 billion for Snapchat’s parent company, but it is also raising nearly $1 billion for the founders and early investors.
Snap SNAP, +0.86% announced Wednesday evening that it will sell 200 million shares for $17 apiece in the largest U.S. IPO since 2014. The company will sell 145 million of those shares, while executives and early investors will pitch in 55 million shares that they amassed before the IPO and take proceeds of $935 million home.
Don’t miss: Six things to know about Snap as it goes public
Evan Spiegel and Bobby Murphy, co-founders of the social media company, both planned to sell 16 million shares 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 nearly $3.6 billion at the IPO price, and will together control more than 88% of voting power in the company. Investors who bought class A common stock in the IPO will not have voting rights.
Additionally, on the closing of the offering, Chief Executive Spiegel will receive a restricted stock unit award of 3% of all shares outstanding to be delivered quarterly over three years. This breaks down to an additional $590 million.
Read also: Snap IPO boils down to single question: Do you trust Evan Spiegel?
Michael Lynton, the chairman of Snap, planned to sell 54,907 shares in the offering, bringing in $933,419. Lynton will still own 2,964,733 shares after the offering, worth more than $50 million based on the offering price.
Benchmark Capital Partners and Mitchell Lasky, a general partner at the firm, planned to collectively sell at least 10,695,868 shares, which brought in roughly $181.8 million. The early investors still own 120,903,572 shares, valued at more than $2 billion at the IPO price.
Other venture-capital shops that invested in Snap are also selling shares. Lightspeed Venture Partners planned to sell at least 4,632,890 shares, amounting to about $78.8 million. General Catalyst planned to sell 572,904 shares to bring in a bit more than $9.7 million. Lightspeed still owns 81,996,630 shares, now worth almost $1.4 billion, and General Catalyst owns 10,139,736 shares, worth almost $172.4 million.
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