Snap Inc., the parent company of ephemeral photo-messaging app Snapchat, has set a valuation for itself between $19.5 billion and $22.2 billion, which equates to $14 to $16 a share, the Wall Street Journal reported on Thursday. Such a move would give the impression of bursting demand for Snap stock, which would help the company's founders justify an even higher valuation later on. According to a schedule obtained by Business Insider, the IPO is expected to price on March 1. You can't buy Snap stock just yet; the company is about to embark on what is known as a "road show", in which it meets with a variety of big investors and analysts to drum up interest in its shares.
Snap, which launched in 2012 with an app that sends disappearing messages, rebranded itself past year as a camera company and started selling $130 video camera glasses. By the fourth quarter, average daily active user growth fell below 50% for the first time since at least 2014, according to the deal prospectus. The company makes the majority its money through advertising, and it booked revenue of $404.4 million previous year, up from just $58.6 million in 2015. It plans to list on the NYSE under the symbol SNAP.
Spiegel with Snap cofounder Bobby Murphy.
Snap issued those shares for almost $31, but in October it gave each of its shareholders an extra share for every one they owned, cutting the value of all in half.
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Michael Crapo, R-Idaho, said he hoped the Fed would cooperate with the Trump administration in its efforts to reduce financial regulation.
"As a result, Mr. Spiegel and Mr. Murphy, and potentially either one of them alone, have the ability to control the outcome of all matters submitted to our stockholders for approval, including the election, removal, and replacement of directors and any merger, consolidation, or sale of all or substantially all of our assets", the regulatory filing reads. It's also set to be the first United States listing from that industry this year, according to data compiled by Bloomberg.
And the company and shareholders could offer up another $480 million if the initial batch sells out, for a total offering of up to $3.7 billion.
Net losses widened to US$514.6 million from US$372.9 million in that period.