IG, one of the largest forex, CFD and spread betting (UK only) brokers, announced it is launching CFD trading and spread betting on the eventual IPO of the technology company Snap Inc. that stands behind the Snapchat mobile application. For the time being, trading will be done in a grey market, available in the ‘popular markets’ watchlist.
The trade will be settled based on the official closing price of the first day of trading, as reported by Bloomberg, IG says.
In a message to its clients IG notes previous grey markets like Royal Mail and Facebook have been very popular among clients.
“Historically IG’s grey markets have been solid indicators of where companies official launch prices will end up,” said Chris Beauchamp, IG Chief Market Analyst. “Snap is one of the biggest and most anticipated US tech IPOs for years, with the potential to rival the excitement witnessed when Facebook and Twitter went public.”
Snapchat is an image messaging and multimedia mobile application that launched in 2011. Earlier this month the parent company Snap Inc. announced its plan to raise $3 billion in an IPO, rumored to take place in March on the NYSE.
Some analysts and media note that this would be the biggest US-listed tech IPOs ever and expect that the company's valuation could reach $25 billion. Others are less enthusiastic and note that Snapchat has to convince investors that it can attract users outside the millennial demographic that is already using it anyway and how it plans to increase its revenue.
The latest Snapchat financial report revealed that in the last quarter of 2016 the app had an average of 158 million daily active users. In 2016 the company had a revenue of $404.5 million, up from $58.7 million in 2015. Net loss, however, also grew in 2016 and reached $514.6 million.
IG Group was established more than 40 years ago and was the first financial services provider in the UK to launch spread betting. It also offers trading in forex, CFDs, stocks, bonds and cryptocurrencies like Bitcoin.
IG is regulated by UK’s Financial Conduct Authority (FCA), but its subsidiaries are also regulated by the relevant authorities in the countries where they operate (Australia, Japan, South Africa, UAE and Singapore). Besides, IG is listed on the LSE, and is a member of the FTSE 250.