Shares of Snapchat's parent company were climbing 10% to $27.06 on Friday afternoon, after popping about 44% the day before. Snap's first-day pop was bigger than those for Facebook (FB) , Alibaba (BABA) and Alphabet's (GOOGL) .
With a market cap of more than $30 billion, Snap is now more valuable than Twitter and Viacom (VIAB) , and isn't far behind eBay (EBAY) and Tesla Motors (TSLA) . The company now has about $2.3 billion in cash to use for acquisitions, new hires, product development or whatever else it chooses to do.
But for all the fanfare, many questions remain about what pressures Snap may face now that public investors' money is on the line and all its financials must be laid bare in quarterly reports.
For starters, being a public company is very different from being a Silicon Valley startup and, with that, comes a certain set of expectations. Snap will probably get a pass for the first few quarters as it works to even out its balance sheet, but investors will still be closely monitoring its top-line results, as well as its ability to scale up advertising revenue, user growth and monetization.
Snap, like many young tech companies, has a certain kind of corporate culture that might be at odds with the pace of Wall Street. The company acknowledged in its S-1 filing that its beachfront Venice, Calif.-based office and other offices around the country are isolated from one another, which could prevent employees from collaborating. Additionally, its millennial-inspired atmosphere (see, for example, its ghost mascot, dubbed "ghostface chillah" after a pop culture reference) will probably be forced to conform more to a more traditional office environment.
"There will be an internal pressure to grow up, fast," said Claire Diaz-Ortiz, an early Twitter employee who left a year after its IPO and is now an author and speaker. "Some early stage startups thrive...on the quirkier hires and off-beat atmospheres they create around their open offices...[but] with an IPO, there can be a lot of pressure to change this." Diaz-Ortiz noted that that Facebook received some flak around its 2012 IPO for its party-like atmosphere.
For his part, Snap co-founder Evan Spiegel, 26, has faced some criticism about his management style, with many employees complaining that major company news trickles down to them long after the plans are developed. Spiegel and Snap's other founder Bobby Murphy, 28, will still maintain most of the clout when it comes to decision-making, in part because the company issued non-voting shares as part of its IPO -- much to the chagrin of activist investors.
Spiegel may hire additional high-level executives to avoid much of the process of answering to shareholders. Snap's Chief Strategy Officer, Imran Khan, is one of the executives largely assigned to be the company's liaison with investors, due to his extensive background on Wall Street. Before joining Snap, Khan, 39, was head of global internet investment banking at Credit Suisse and served as the lead banker on Alibaba's IPO in 2014.
"What ends up happening is these companies with a certain management style hire people to navigate and take some of the pressure off the public side of it," said Peter Costa, president of trading firm Empire Executions. "Businesses don't grow if they don't have the right management."
Former Apple (AAPL) CEO Steve Jobs often preferred to take the backseat on dealing with investors directly, in favor of focusing on innovation and product design, which may signal what Spiegel's priorities will be, Costa noted.
Snap has hired a number account executives -- employees who manage and seek out brand partnerships and other business opportunities -- leading up to its IPO. The company is also seeking to hire more than a dozen ad-related positions ranging from sales operations associates and marketing managers to product managers.
Snap said in its S-1 filing that it generates "substantially all" of its revenue from advertising, so these hires may show that it's trying to beef up its advertising reach. It's a smart move, considering that it will be competing to grab dollars from ad juggernauts like Facebook and Google, who currently maintain a stranglehold on the digital advertising market, said Michael Dzik, an advisor at Triton Research, which helps investors navigate companies preparing for an IPO.
Snap may have some hiccups as new account executives become familiar with Snap's ad pitch, but they'll have to overcome those things quickly if they want to keep on track with revenue targets, Dzik said.
"They will have churn problems and they won't be able to hold onto accounts," he added. "They may have a product visionary and evolve and innovate, but right now the lifeblood of the company is advertising."
Much of Snap's middle management team remains unknown and haven't been publicly touted as have CFO Drew Vollero, Khan or Timothy Sehn, Snap's vice president of engineering who formerly worked at Amazon (AMZN) .
"But are these people as good as the folks at Facebook? I don't know," Dzik explained. "[Those hires] could determine the success or failure of the business."
At least for the time being, Snap will be able to benefit off of an element of forgiveness among investors. Investors recognize that many sweeping changes to corporate culture, management and product development don't occur overnight.
Facebook struggled in its first few quarters as a public company, but Zuckerberg responded by making some changes to its management team and focusing on the "fundamentals that drive performance" in their mobile ad products, Dzik said.
Wall Street is going to want to see that same kind of vigilance from Spiegel, Dzik noted. Snap has built itself on the basis that social media can be creative (e.g. Snap's unique lenses and filters) and it may take some time for the company to show the value of investing in those kinds of new technologies, Spiegel said in an exclusive interview with the LA Times.
Spiegel also acknowledged, however, that Snap still has "a lot of work" ahead of it.