It remains to be seen how the public market will react to Snap, and whether it will emerge as a highly valuable, diversified social-media company like Facebook, or one that does well on I.P.O. day but flops afterward.
The industry has been keeping a close eye on Snap Inc since the upstart published details of its forthcoming IPO back in January in the form of an S1-filing which promised growth but not profit in the short-term. Snapsaid it is planning to sell as many as 230,000,000 shares of its stock, which would net it around $3.68 billion on the public markets. Twitter shares were trading at $16.74 per share on Thursday morning.
Even that is at the lower end of expectations but it could make Snap the biggest technology stock market listing since Alibaba raised a record $25 billion in a NY float in 2014.
"Snap is right to be conservative in setting the initial range". Renaissance Capital, the Renaissance IPO ETF (symbol: IPO) or the Global IPO Fund (symbol: IPOSX), may have investments in securities of companies mentioned. If you add in things like restricted stock units for employees and executives, plus a nice bonus for Spiegel, the valuation could jump to over $22 billion.
Snap, which launched in 2012 with an app that sends disappearing messages, rebranded itself previous year as a camera company and started selling $130 video camera glasses.
Snap was founded in 2011 and booked $404 million in sales for the 12 months ended December 31, 2016. And holders of class C stock, which is only held by Snap's cofounders CEO Evan Spiegel and CTO Bobby Murphy, are entitled to 10 votes per share. Both Murphy and Spiegel are the biggest shareholders in the company, and together they will control about 89 percent of voting rights in Snap once it's a public entity.
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.
The company generates the majority of its revenue from advertising, seeking to challenge the dominance of existing internet giants. Currently, the platform boasts 158 million users. The other banks participating are Goldman Sachs, Barclays, Credit Suisse, JPMorgan, Allen & Company, and Deutsche Bank.