NBC invested $500 million in Snapchat IPO as part of its ambitious investment in digital media
Summary
NBC Universal a unit of Comcast and parent of CNBC invested $500m in Snap during its initial public offering (IPO) and has agreed to hold the shares for at least a year.Stock allocation by Snap to NBC Universal appears to be the only one made to a new investor. This allocation of stock to NBC makes them the only US media company with a stake in Snap. This investment adds to a series of hostile bets in digital media made by Steve Burke, Chief Executive since Jan 2011. For Snap, NBC Universal investment is a vote of confidence from a major media company and they say it may help to justify Snap's $28 billion valuation and encourage other companies to invest. NBC's partnership with Snap provides them with a platform to create programs using its content and brands to reach millennials.
Key Statistics
- Other NBC investments include: $400 million in Buzzfeed and $200 million in Vox
- In total NBC has spent about $1.5 billion on digital assets in the past 18 months
- So far NBC investment has paid off: Snap's trading debut saw stock soar 44% turning the $500 million investment into approximately $720 million on day one.
My Opinion
Social media platforms are not short in popularity at the moment and are not going to be anytime soon so I think that for any company they are quite a wise share investment, as 'Usage of social media on mobile devices is expected to continue to surge' and there is 'room for growth' (quoted from Hardeep Walia a contributor to Forbes) particularly in companies such as Snap.However, more specifically to NBC the company who has invested; they have made a wide multitude of investments which means a great deal of outgoings for which there is the possibility of some not paying off in the same way that Snap has done at the moment so they should be a bit more careful.
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