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Snap Inc Priced Its IPO Way Above the Estimated Range

Snap Inc 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.

At $17 a share, the parent of popular disappearing-messaging app Snapchat has a market valuation of roughly $24 billion, more than double the size of rival Twitter (TWTR) and the richest valuation in a U.S. tech IPO since Facebook in 2012.

The company had targeted a valuation of between $19.5 billion and $22.3 billion.

The book was more than 10 times oversubscribed and Snap could have priced the IPO at as much as $19 a share, but the company wanted to focus on securing mutual funds as long-term investors rather than hedge funds looking to quickly sell, the source said.

The source asked not to be named because the matter is confidential. Snap declined to comment.

The share sale was the first test of investor appetite for a social-media app that is beloved by teenagers and 20-somethings but faces a challenge in converting “cool” into cash.

Despite a nearly 7-fold increase in revenue, the Los Angeles-based company’s net loss jumped 38% last year. It faces intense competition from larger rivals such as Facebook (FB) as well as decelerating user growth.

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Snap priced 200 million shares on Wednesday night at $17, above its stated range of $14 to $16 dollars a share.

The sale had the advantage of favorable timing. The market for technology IPOs hit the brakes in 2016, marking the slowest year for such launches since 2008, and investors are keen for fresh opportunities. The launch could encourage debuts by other so-called unicorns, tech start-ups with private valuations of $1 billion or more.

Investors bought the shares despite them having no voting power, an unprecedented feature for an IPO despite years of rising concerns about corporate governance from fund managers looking to gain influence over executives.

Snap is set to begin trading on Thursday on the New York Stock Exchange under the symbol SNAP.