Snapchat parent files for $3 billion IPO
Summary
Snap (Parent Company of Communications app - Snapchat) filed public documents for its initial public offering (first sale of stock by a company to the public). It is the first major tech IPO this year and the largest USA IPO since Facebook. Snap is positioning itself as a "Camera company". They say they believe that reinventing the camera represents their greatest chance to better the way people live and communicate.
Key Statistics
- IPO seeks to raise $3 billion on the New York Stock Exchange under symbol SNAP
- SNAP said it has 158 million daily users
- 2.5 billion photos are created and shared daily
- Despite the massive growth, SNAP is loosing money. In 2016, SNAP had total losses of $514.6 million wider than the $373 million a year earlier
- Revenue, mostly from advertising clocked in at just over $400 million
- Users 25 years or older visited Snapchat approximately 12 times a day for about 20 minutes
- Those younger visited 20 times daily for about 30 minutes
Snapchat is a widely used app by people of all ages but it is a free platform at the end of the day so I am not surprised they are clocking in huge losses. Given their losses I can understand why they have filed their IPO. However, judging by how large their losses are which have grown significantly since 2015 I think that SNAP need to think of a more long term plan to combat their losses. Yes, regular innovation is good but as I say the service is free so that does not help with their losses. They can't just keep filing IPO's to keep afloat because they do not know how much they will get from the IPO's.
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