Snapchat began as a lean startup founded in 2011 by Stanford University students Evan Spiegel, Bobby Murphy, and Reggie Brown, as a social network to make photos disappear. It was originally called Picaboo, and the three founders had an unsuccessful summer launch and an ownership dispute. Spiegel locked Brown out of the accounts. In September the name was changed to Snapchat.

By 2012, the app had over 100,000 users but rising operating costs. Jeremy Liew of Lightspeed Venture Partners discovered and invested $485,000 in Snapchat. Spiegel dropped out of college just before graduation and moved into his father's home with the founding team. In December 2012, Facebook (FB  ) launched its Snapchat competitor Poke, but Poke only helped Snapchat's popularity. In 2013 Brown sued Spiegel, Murphy, and Snapchat over intellectual property claims. In 2013 Spiegel rejected Facebook's offer to buy Snapchat for $3 billion, a controversial move then. In early 2014, Snapchat was hacked, and the personal information of over 4 million accounts was leaked. Snapchat apologized and settled with the Federal Trade Commission over misleading users. But Snapchat continued to grow, and investors valued it at $10 billion by summer 2014.

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In 2015 Snapchat began to pivot to the future. It hired a chief strategy officer from Goldman Sachs (GS  ). It hired a chief financial officer from Mattel (MAT  ). It expanded office space. It also finally found a steady revenue stream, ad-sponsored geofilters. Its app added the popular lens feature. Snapchat secretly started a new project on sunglasses and bought a smart glasses manufacturer. In September 2016 Snapchat surprised the world with its announcement of the Spectacles, smart sunglasses, and a name change to Snap, Inc (SNAP  ). On February 2, 2017, Snap filed to go public and raise $3.4 billion. Investors learned that Snap had paid Brown $157.5 million to settle. At the time of filing, Snap had over 150 million daily users.

Thursday, March 2 was the day of Snap's initial public offering (IPO), the biggest tech IPO since Facebook's. Its IPO debuted at a price of $17, valuing the company at $24 billion. In its first day of trading, demand for Snap stock surged and its price gained 44%, closing at $24.48. On Friday, the stock leaped 10.7% to close at $27.09. By any measure, it was a highly successful IPO. Spiegel and Murphy sold 16 million of their shares on Thursday, netting $272 million each. Snap's first investor Lightspeed Venture Partners sold over 4.6 million shares worth $78.8 million. Other big winners included Mountain View, California's Saint Francis High School, which earned $24 million, and Comcast's NBC (CMCSA  ), whose shares were worth over $720 million. And Wall Street banks earned millions from underwriting commissions and potentially more from overallotment exercise.

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This week Snap's stock price fell almost 22%, closing on Friday at $22.07 and losing most of its IPO day gains. Its current market capitalization is just over $26 billion. Snap has never recorded a profit, but must do so for long-term success. It must also expand its user demographics to include older people. Finally, the Securities and Exchange Commission has questions about Snap stock's unequal voting rights. So Snap has headwinds and risks going forward.

The author does not hold any positions in any of the stocks above.