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Snap Inc. (SNAP): Snapchat IPO ALMOST Beats the Odds

Here's how Vegas saw SNAP stock, and the bet that should've been

     

They say you can place a bet in Las Vegas on almost any proposition. And while most of the action is on sports contests, the Snapchat IPO from Snap Inc. (NYSE:SNAP), I thought, would surely be attractive to visitors in the town’s sports books.

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And so it was that I went online in search of Las Vegas odds on the Snapchat IPO. Looking for any kind of prop that investors could hang their hats on when it came to handicapping SNAP stock coming out of the gate, I wasn’t able to find much.

However, a website called Las Vegas Sports Betting in November had five props available to bet on. These are taken directly from its site:

What will Snapchat’s IPO be valued at?

  • Over 25 Billion Dollars: -160
  • Under 25 Billion Dollars: +120

Answer: $22 billion.

Those who bet the “over” prop would be out $160. Those who bet the under would win $120 on top of the $100 they bet.

What will Snapchat’s ticker symbol be?

  • SNAP: -300
  • CHAT: +225
  • BOO: +800

Answer: SNAP

So, those who bet on SNAP put down $300 and won an additional $100. The other two bets are out $100.

Which exchange will Snapchat (Snap Inc.) be listed on?

  • NYSE: -120
  • NASDAQ: -120

Answer: The New York Stock Exchange. Those who bet on NYSE won $100 on top of the $120 bet; those who bet on the Nasdaq lost $120.

Will Snap Inc.’s market capitalization have increased or decreased after six months following their IPO?

  • Increased: +155
  • Decrease: -220

Answer: Still to be determined, although Snapchat closed up 44% on its first day of trading from its $17 IPO price.

Will Snap Inc.’s shares close above or below the IPO price on the first day of trading?

  • Over IPO Price: EVEN
  • Under IPO Price: -140

Answer: Closed at $24.48, above its IPO price. If you bet over, you won $100; if you bet under, you lost $140.

What About a Higher First-Day Return?

One prop conspicuously absent from this list is the over/under on its SNAP stock finishing up 50% on its first day of trading. I wonder what the odds would have been for something like that?

Well, University of Florida professor Jay Ritter, known widely for his work studying IPOs, provides some clues for oddsmakers.

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