Snap Files For IPO, Plans To Raise $3 billion

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Ever since 26-year-old Evan Spiegel launched Snapchat 5 years ago, it has filtered its way into the lives of teenagers and even adults across the world. From voice changers to numerous filters that are added every day, Snapchat seems to have it set.

Snapchat? Oh Snap!

Snapchat has now decided to go public. The parent company of Snapchat, which changed it’s name to Snap in September of 2016, filed for an IPO (initial public offering) on the 2nd of February 2017 on the New York Stock Exchange. With this IPO, Snap hopes to raise $3 billion. The IPO also revealed a number of things about Snap’s business and assets. For example, Snap employs a total of 1,859 employees and has a daily active user base of 158 million of which 69 million are located in the US and 53 million in Europe. According to reports, the IPO would value Snap at approximately $20 billion or more.

Snapchat
Image taken from: The Indian Express

In addition, the filing also declares that the company is a camera company, rather than just an app developer. To this extend Snap has Spectacles, their wearable video-recording sunglasses.

For 2015, Snap reported a revenue of $58.7 million which grew significantly in 2016 to a staggering $404.5 million in 2016. Sadly, with great revenues, Snap also faced great losses. The company lost $372.9 million in 2015 and $514.6 million for 2016 which if you notice is more than their revenue.

Snap
Image taken from ZDNet

Snap’s IPO come at a rather opportune time. If you remember, Instagram, now owned by Facebook has been on the warpath with Snap and Snapchat since they locked filters. It was a futile attempt but that all changed when Instagram recently launched Instagram Stories, an almost duplicate attempt of Snapchat Stories.

It appears that there is a visible decline in Snapchat Stories whilst the opposite seems to hold for Instagram seemingly both the beneficiary and the cause.

Rather than get Celebrity endorsements the way that Twitter, Instagram, and YouTube would, Snapchat is aimed at a more P2P (peer-to-peer) chatting and photo/video sharing platform. This involves one to one and one to many users.

As per the IPO, Snap’s shares will be a dual class stock structure. This means that control of stocks will only be between a few key executives. The two co-founders would have full authority over all stockholder decisions as they control a majority of the voting stock.

What are your thoughts on Snap’s decision? Leave a comment in the section below.

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