Snapchat's IPO by the Numbers
- Author: Carolyn Briggs Mar 02, 2017,
Mar 02, 2017, 11:41
This puts the company's valuation at $24 billion, and allowed it to raise around $3.4 billion in funding. The whirlwind tour, known as a roadshow, was well-received by investors, Connaughton said. "While highly anticipated IPOs of this magnitude may be tempting to jump in immediately, historically many IPOs-particularly social media companies-often need time and room to acclimate to the rigors of being a public company".
Snap is targeting a valuation of between $19.5 billion and $22.3 billion for its listing on the New York Stock Exchange on Thursday. Kurt Schacht, the chairman of the SEC's Investor Advisory Committee, told Reuters that the committee will review whether Snap will have to report all of the same information typically disclosed by public companies.
In the updated IPO registration document that the company has submitted to the U.S. Securities and Exchange Commission on Monday, it clarified that it expects one-fourth of Class A common stock that is 50 million shares to be kept for a one-year lock-up agreement.
But despite Snapchat's popularity, user growth has slowed recently. The filing says that 50 million shares are expected to be subjected to the so-called lockup period.
Snap's insane camera plans and its general IPO blunderbuss would be embarrassing if it weren't going make Spiegel and friends very, very rich. But while Twitter ended its first day of trading at a healthy $44.94, Facebook was virtually flat with a share price of $38.23, which analysts attributed to a too-high share price - something that Snapchat is now looking to avoid. The drone market is expected to be worth $127 billion by 2020, which makes a sizable target for any company.
How it compares: Snapchat is a growth company, and it really only began to monetize its users later in 2015 - so it's no surprise that the company's overall revenue is far behind its competitors.
"We're projecting this gap to widen as Instagram focuses on growing its user base to maximize reach, while Snap Inc. seems to be focusing on keeping its niche audience engaged and spending more time within the app".
In 2016, Snapchat lost $514.6 million. "That alone should be enough to lead to upside to the offering price range this year while management works to solve most of the above issues", asserts Anthony.
A lot of people are thinking that it is either going to be like Facebook, which is up more than 250% since going public in May 2012 and is still growing users and revenue like insane, or Twitter, which has lost more than half its value since going public in November 2013 and has basically been stuck in place for a couple years.
Although Snap is going public at a much earlier stage in its development than its two rivals Twitter or Facebook, the 5-year-old company is valuing itself at almost 60 times revenue and more than double the 27 times revenue Facebook fetched when it went public in 2012.
Facebook's dominance is apparent, but even the social giant is taking pages from Snapchat's book.