Shares in little known start-up Snap Interactive have almost doubled in value in recent days after investors eager to cash in on the initial public offering of Snap Inc, the maker of the photo-app Snapchat, mistook it for the popular app.
Snap, last week, said it had filed for a $3bn initial public offering that could be the largest stock market floatation of a US tech company in years.
In what seems to be a case of mistaken identity, overeager investors rushed to invest sending shares of Snap Interactive up by 164 per cent in the four days following the filing.
Bloomberg reported the price change on Wednesday.
The lesser known Snap Interactive is a video chat and online dating service provider valued at around $69m, according to Bloomberg.
Snapchat, founded in 2011 and based in San Francisco, is real time video communication app which allows users to communicate with close friends by sending conversational pictures that disappear minutes after being send.
The number of Snapchat's daily active users grew to an average of 158 million at the end of December, up 48 per cent year-on-year. However, its net loss widened to $514.6m in 2016 from $372.9m the year before, according to Reuters.
This isn’t the first time investors have mistaken a little known company for a much, much bigger one.
In 2013, stocks in Tweeter Home Entertainment Group, soared more than 600 per cent as excitement ran high about a share sale at Twitter.
Similarly, stocks in Oculus VisionTech Inc. rallied as much as 155 per cent after Facebook announced plans to buy Oculus VR.
On US election day the stocks of a little-known Chinese company whose name sounds like “Trumps wins big” rose as the then candidate Donald Trump started widening his lead over Democrat Hilary Clinton.
