×

Snapchat's young users snap up stock — and want more IPOs

Evan Spiegel, co-founder and CEO of Snapchat
Getty Images
Evan Spiegel, co-founder and CEO of Snapchat

Snap, Inc. the parent company of the Snapchat app, has a loyal base of nearly 160 million visitors monthly, mostly teens and young adults.

So now that the company has gone public, guess who's interested in snapping up Snap stock?

Young investors.

More on USA Today:
Even PlayStation and Xbox are happy about Nintendo Switch
Here's the list of firms supporting transgender student's Supreme Court case
Pizza Hut made shoes that will order pizza

Ryan Eshagi, an 18-year-old freshman at the University of California, Irvine, said he became "addicted" to the app when he was in eighth grade. "It defined the way teens and young adults communicate with one another," he says.

He bought 20 shares, financed by his part-time job helping high school students with college applications, and plans to hold onto the shares for quite some time. "I see the company growing a lot," he says.

"There's a lot of upside in Snapchat going forward and I wanted to partake in its IPO," said Will Jamieson, 23, who works in marketing in Charleston, South Carolina. He also owns Tesla.

Chris Stearns, 30, who lives near Virginia Beach, bought 13 shares Friday morning because he sees Snap as the next Facebook.

"Snap is the first IPO-centric stock I've taken," he says. "It's a huge growth opportunity."

Stearns, who works with his dad putting in glass in homes and businesses, says that every person he's hired over the past few years in their 20s was always on Snapchat.

"They use it constantly," and their usage struck a chord with him.

Millennials have largely stayed out of the stock market, held back by student loans, recent memories of the last crash and financial crisis, and a shortage of funds. Brokers and advisers had wondered, given Snapchat's popularity, if this IPO could entice them in.

The early answer: yes.

Online stock trading app Robinhood, whose core demographic is 18-24, says that Thursday was its biggest day ever, and that 43% of all its traders that day went for Snap stock.

"Snap's IPO revitalized investing among the younger generation," notes Baiju Bhatt, the co-founder of Robinhood, whose core audience is primarily 18-24. "We also saw a surge in new accounts, with many new customers opening up their first brokerage account."

The median age of Robinhood investors buying Snap on Robinhood has been 26, the same age as Snap CEO Evan Spiegel.

So far, any young investor who dipped his or her toe into the market with the Snap offering is feeling great.

Snap went public Thursday, surging 44% from its opening price of $17. By Friday it had gone up 10% to close at just over $27.

Spencer Wilson, who lives outside of Flint, Mich. just turned 17, and he, too, now owns 20 shares of Snap.

"Every single one of my friends uses it," he says. "I think it will be really successful."

That brand loyalty drove Snap's younger investors to the stock, overriding concerns by many financial advisers that the unprofitable company, whose user growth started to slow at the end of last year, was more likely to follow Twitter's stock market travails than Facebook's success.

Zac Vineyard, 33, a web developer near Boise, Idaho, works for a local university, and being around the younger students convinced him about the power of Snapchat.

"It's the only way I see people younger than me communicate," he says. "Snapchat has clearly captured this audience in an engrossing way."

A continued lift in the stock could indeed entice more into the market, which is poised for more IPOs after a long hiatus.

Tim Edwards, 35, who lives near Chicago, bought 35 shares of Snap and is already looking ahead to the next big tech IPO, hoping to see ride-hailing apps Uber and Lyft and hotel alternative Airbnb in 2017.