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.