Snap Inc to Receive Major US Listing – Worth $25 Billion

Snap Inc to Receive Major US Listing – Worth $25 Billion

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Snapchat to Receive Major US Listing
Snapchat to Receive Major US Listing

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.

 

Snapchat to Receive Major US Listing - Facebook surpasses this with 1.2 billion users
Snapchat to Receive Major US Listing – Facebook surpasses this with 1.2 billion users

 

The biggest draw to the Snapchat platform is the imaging services, chat and messaging

Around 70% of it’s users prefer this to only 5% who use it for published events and sponsored media content.

Facebook can sense Snap is serious competition, however. Snap declined Mark Zuckerberg’s offer to buy Snapchat for $3 billion three years ago. The founders reasoned that it would not be worth the smaller short term gain.

But it is clear that Zuckerberg is attempting to competitively redevelop Instagram. Recent updates included such features as story time lines and more varied filters. These are clearly reminiscent of features found on Snapchat.

 

The younger generation prefer the short-lived self-deleting nature of Snapchat

This feature was the first of its kind within multi-media social media apps. Younger people prefer quicker messaging turn around as they have more active social lives. Uploading a picture with a view time of mere seconds contrasts with the long-term diary nature of Facebook. Facebook feels comparatively slow to Millennials. Spiegel created the app with this in mind.

 

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