Snapchat

Shares in Snap Inc. rose 44% on the first day of trading Thursday after the third-largest tech initial public offering ever valued the parent company of messaging app Snapchat at $24 billion.

More than 200 million Snap shares — the entire size of the IPO — changed hands over the course of the day, accounting for roughly 10% of the total volume of trading on the New York Stock Exchange on Thursday.

The stock closed at $24.48, well above the $17-a-share price of Wednesday’s IPO. The book was more than 10 times oversubscribed and Snap co-founder Evan Spiegel earned $272 million on the offering.

Reuters said the offering defied “doubts about the company’s early-stage business model and slowing user growth,” adding that “investors have bet on its quickly growing revenue and visionary leader.”

According to a regulatory filing, Snap’s revenue, which comes from advertising, soared to $404.8 million in 2016 from just $58.6 million, with revenue per average user increasing to $1.05 from 31 cents.

But growth in daily active users of Snapchat slowed to 5% in the last three months of 2016, compared with 11% in the year-earlier quarter. In 2009, when Facebook’s daily user count was roughly the same size, its quarterly user growth was at a roughly 30% pace.

Some analysts continue to be skeptical about Snap’s prospects. “Snap is a promising early-stage company” but faces several obstacles, including “aggressive competition” and a “core user base that is not growing by much,” Brian Wieser, an analyst with Pivotal Research Group in New York, wrote in a note to clients.

“Investors also will be exposed to what appears to be a sub-optimal corporate structure operated by a senior management team lacking experience transforming a successful new product into a successful company,” he added.

Anthony DiClemente of the investment firm Nomura Instinet wrote that the “upside in [Snap] shares is limited” by several factors, including “already slowing growth in daily active users” and “fierce competition from larger rivals such as Facebook.”

Snap’s shares “are fairly valued at best at the IPO price,” he said.

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