Category Archives: Snapchat

Snapchat Goes Public

Snapchat is six years old and has become popular among younger generations. It allows users to take pictures and add cartoonish images with this app. This social media company just went public and now trades on NADSAQ under symbol “SNAP.”

 

Within the first couple of days, the stock price rose substantially, and now the company is worth $30 billion. This makes a Price/Sale ratio of 77, while the company isn’t profitable yet. This worries many analysts who feel the price isn’t warranted by fundamentals. But, speculators love to trade it.

 

According to CNN Money, Snapchat is now worth more than Delta Airlines or CBS. In fact, its market value is higher than that of nearly 400 companies on the S&P 500 list.

 

The company lost over $500 million last year, and this is up from over $370 the year earlier.

 

In the past, investors who bought Facebook and Google have prospered. But Twitter has disappointed investors. What makes Snapchat so special to warrant its valuation? Some believe the company has lots of potential when it comes to monetization. Others don’t think this stock is worth the money.

 

“It is significantly overvalued…We value Snap at $10 per share,” claimed Brian Wiesel, an analyst at Pivotal Research.

 

What’s more, Snapchat’s user growth has halted in the last months of 2017 after Facebook launched Instagram feature that copies much of what Snapchat has to offer.

 

Whether overvalued or not, investors won’t have much to say yet. The majority of the votes are in the hands of Snapchat’s founders.

 

 

 

Snapchat Files Paperwork for Public Offering

Snap, Inc. – the parent company of the massively-popular social messaging app Snapchat – filed paperwork last week to tap stockmarkets in an initial public offering. Markets greeted the news with excitement, as Snap’s Wall Street debut is expected to add pep to American bourses in early 2017.

 

Paperwork filings with the Securities and Exchange Commission, America’s stockmarket regulator, are an essential part of the process by which a company enters the public markets. The information that must be provided to regulators includes detail on who holds stock in the business and on what terms shares will be offered to the public.

 

Under federal law, a business planning to go public does not have to immediately announce that it has made a submission to the commission. According to the New York Times, Snap actually made its filing with the SEC last Monday, before the presidential election.

 

Reports have indicated that Snap will float on the market will a valuation of more than $30 billion, making it one of the largest IPOs in recent years. The decision to list comes against a broader downward trend in the IPO market; there have been just 96 public offering of large companies in the United States this year, well below previous marks.

 

However, some observers believe that a successful IPO for Snap could induce other Silicon Valley giants, like Airbnb and Uber, to tap markets themselves. Those companies, which have more stable revenue streams than Snap, could attract much larger valuations.