Snapchat reveals plans for USA stock market filing, according to several reports
Feb 03 2017 by Harriet Stone
Giving the company an overall valuation in the region of $25bn, Snap Inc have filed for an initial public offering on the New York Stock Exchange with the proposed "SNAP" ticker.
Here's how the three companies stack up.
In an SEC filing released on Thursday, Snap mentions Apple several times as a competitor, despite the fact that Snap's revenue comes from advertising, a business that Apple nearly entirely ignores. It has a programmatic offering [AdExchanger coverage], which was mentioned in the IPO filing with scant details offered.
USER METRICS: Daily active users and other measures of Snapchat's reach will be the most watched numbers by investors and analysts tracking the stock.
The really terrifying part about Snap stock, though, and the one that investors should pay the most attention to, is how absurdly expensive it will be. "For example, users 25 and older visited Snapchat approximately 12 times and spent approximately 20 minutes on Snapchat every day on average in the quarter ended December 31, 2016, while users younger than 25 visited Snapchat over 20 times and spent over 30 minutes on Snapchat every day on average during the same period". Whether Snap can successfully ramp up user activity amid fierce competition from major players like Facebook and Instagram, which aren't afraid to copy Snapchat's best features, remains to be seen. It brought in $404.4 million in revenue, way up than a measly $58 million it brought in in 2015 (a massive 6X increase!), but it had to spend buckets of money to make that work.
Snap plans to use proceeds from the offering for general corporate purposes, which may include acquisitions, the filing shows. Snap also made moves to diversify past year with the launch of Spectacles, a pair of smart glasses that record video clips. It seems like it might be the latter. And for good reason: ARPU is central to the company's past growth and future momentum. If Snap can fetch the same price in its IPO, Spiegel and Murphy each will be worth $7 billion.
Snapchat opened its advertising business in October 2014, and that business accounted for 96 percent of its parent company's total revenue previous year. 26-year-old C.E.O. Evan Spiegel and his co-founder Bobby Murphy both stand to make about $5 billion off of their shares in the company when it does finally go public. While many companies, including Alphabet (GOOGL), have voting structures that give more rights to founders, it's highly unusual to not sell any voting shares. Back in May 2015, Spiegel got investors' hopes up when he said, "We need to IPO". The company is seeking to raise $3 billion from the IPO. Handles About 2.5 Billion Photos Per Day In its S-1 filing, the company reported that it facilitates about 2.5 billion photos daily created and shared among its subscribers.