After Early Surge, Snapchat Founders’ Net Worths Drop $1 Billion Each
For Evan Spiegel and Bobby Murphy, billionaire cofounders of social media giant Snapchat, the first two days of running a publicly traded company brought spectacular returns. The next week, gravity kicked back in.
On Thursday, March 2, Snapchat’s parent company, Snap, began trading on the New York Stock Exchange. By the end of the day, shares were up more than 40% from the company’s $17 initial public offering price. Then, on Friday, the stock rose an additional 11%, closing above $27 per share. Those gains added more than $2.1 billion apiece to the personal fortunes of Spiegel and Murphy, who combined hold nearly 90% of Snap’s voting power.
Since then, initia l investor fervor has cooled, even reversed. Snap’s stock fell 18% between its closing price on Friday, March 3 and the end of normal trading at 4 P.M. Eastern Time on Friday, March 10. For Spiegel and Murphy, that meant a turnabout in their net worth trajectories; each of their fortunes fell by over $1 billion. They are now worth $4.9 billion apiece, according to FORBES’ real-time rankings of the planet’s wealthiest people.
Despite the fall, the twenty-somethings are likely satisfied with their current positions. Spiegel, 26, and Murphy, 28, are now two of just four self-made billionaires under 30. Spiegel is the world’s second youngest self-made billionaire; only fellow 26-year-old Stripe cofounder John Collison, whose birthday is two months later, ranks ahead of him.
Murphy and Spiegel launched Snapchat in 2011, when Murphy was writing code at Revel Systems and Spiegel was still an undergrad at Stanford, where the pair had previously met as fraternity brothers. (A third cofounder, Reggie Brown, was reportedly forced out later in 2011. He filed a lawsuit seeking “over a billion dollars,” but settled for $157.5 million in 2014.) The app has since exploded, now boasting 158 million daily active users and $404.5 million in 2016 revenues.
Even with such impressive numbers, some question whether Snap deserves its current market value. User growth has slowed considerably of late as rivals like Instagram have introduced their own disappearing photo and video features, and the business is still operating at a heavy loss. At present, not one analyst recommends buying Snap shares, according to data from FactSet .
Should the stock’s downward trend continue, Murphy and Spiegel will be in for a turbulent ride. They need only ask Twitter cofounder Jack Dorsey.
Ryan Mac contributed to reporting.