Skip to footer

Snapchat: the biggest US tech IPO since Facebook?

The app that allows people to send photos and videos that quickly disappear could soon sell company shares to the public.

|
Mike Segar/Reuters/File
An image of the Snapchat logo created with Post-it notes is seen in the windows of Havas Worldwide at 200 Hudson Street in lower Manhattan, New York, in May 18, 2016.

In what could be the biggest stock market event in a couple of sluggish years, the parent company of Snapchat, the app that allows people to send photos and videos that quickly disappear, reportedly has filed for an initial public offering (IPO).

The Ventura, Calif.-based Snap Inc. recently filed with the Securities and Exchange Commission under a law that allows companies with less than $1 billion in revenue to file paperwork confidentially to keep their financial records concealed from public review while they sort out the transaction, according to Reuters, which spoke with anonymous sources familiar with the filing on Tuesday.

If Snap decides to go public – 75 percent of companies that file for an IPO do not – it could complete the process by March. Valued between about $20 billion and more than $30 billion, the app company’s share offering would be the biggest US tech IPO in the United States since Facebook’s public debut in 2012, when that company was valued at $81.2 billion. Chinese company Alibaba Group Holding went public in the US two years ago, when it was valued at $170.9 billion, in the largest IPO ever.

This year saw so far has seen the fewest IPOs since 2009, according to the Wall Street Journal, which reports that 103 companies listed their shares in the US this year, compared to 165 last year.

Snapchat makes money from one source: ads shown to its 100 million daily users, who include 41 percent of 18- to 34-year-olds in the US, according to Snapchat.

Though it has only one source of revenue, a concern for investors, the company’s two-year old advertising business could reach $1 billion in sales next year, up from approximately $350 million expected this year, as The New York Times reports. Specific financial data about the company will be available when its IPO filing is made public.

Snapchat was founded in 2011 by Stanford University students as a service that delivers text messages that disappear within seconds. Today it has grown into a sophisticated communications platform that offers a comprehensive and fun way to talk to friends, which has it poised to compete for online advertising domination with companies such as Facebook, which recently reported that its third-quarter revenue shot up by 56 percent to $7 billion, and its profit for the same time period nearly tripled to $2.38 billion.

In September, Snap expanded into the technology hardware category with the launch of sunglasses that can shoot video, called Spectacles.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to Snapchat: the biggest US tech IPO since Facebook?
Read this article in
https://www.csmonitor.com/Business/2016/1116/Snapchat-the-biggest-US-tech-IPO-since-Facebook
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe