Snapchat plans $3-billion IPO

The parent company of photo-sharing app Snapchat, Snap Inc., officially filed to go public on Thursday. In its first public prospectus, Snap outlined its strengths and weaknesses, giving potential investors a first look at the company’s finances. The company is looking to raise $3 billion in the offering and is estimated to be valued at $20 to $25 billion, which would make it one of the most significant offerings in tech history.
In Thursday’s filing, Snap reported a tremendous increase in revenue of $404.5 million for 2016, up from $58.7 million in the previous year. The company also says that it had 158 million daily active users as of the end of 2016, while an average of 2.5 billion “snaps” are created on Snapchat every day. Its net loss widened to $514.6 million in 2016 compared to $372.9 million in 2015, although this represents a decline in loss due to the increased revenue.

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Last year, Snap filed confidentially for an IPO with the U.S. Securities and Exchange Commission.

As part of the sale, the company will not be selling any voting shares, leaving the co-founders in control. It plans to list its shares on the New York Stock Exchange under the ticker SNAP. Morgan Stanley, Goldman Sachs, J.P. Morgan and Deutsche Bank Securities are leading the offering.

However, Snap may find itself under increased pressure to improve transparency, as the IPO comes just days after P&G offered a searing criticism of the media supply chain, saying that it spends “enormous amounts of time” trying to understand, analyse and explain the differences between Facebook, Instagram, Snapchat and other platforms.

(Source: Fashion Network)

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