Snap Inc., the developers of Snapchat and Spectacles are heading into the big time
This February they have announced their intention to float Snap Inc. on the stock market.
Evan Spiegel and Bobby Murphy, who invented Snapchat, are set to become multi-billionaires, their stakes worth $5 billion. Analysts have claimed this to be the biggest launch since Alibaba and Facebook. Facebook launched at a value of $81 billion in 2012. Snap Inc.’s flotation value will approximately be $20-25 billion.
Snap mentioned to the regulators in their formal announcement that they don’t expect profit
They even anticipate losses. However, Martin Garner, an analyst for CCS Insights, disagrees. He sees Snapchat as a worthy competitor to Facebook. Through both platforms revenue is primarily gained through advertising.
So far Snapchat has never made a profit. But despite losses acquired last year of $515 million, the company made $404 million. Losses occurred due to company investment into research and marketing. Snap’s primary intention is to raise $3 billion. This will be via share sales in order to set the company’s market price. The founders will retain control of the company as purchase of shares will not include voting rights.
Currently, Snapchat has a 160 million daily user base aged between 13-24
Facebook surpasses this with 1.2 billion users. Younger users are being lured away by new social media platforms such as Snapchat and Facebook has a demographic that is aging comparatively. But it still leads as the most popular social media platform.
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