Maritza Vega | @maritzavegaPR
Snap, Inc. isn’t a small company anymore. From the famous dog filter to Spectacles, Snap, Inc. has developed their popular application, Snapchat, into an interactive photo messaging app. Users have the ability to take photos, record videos, write text, and choose from many of the filters that come with the app. Seeing success and growth in the application and with Spectacles, CEO Evan Spiegel decided to file for IPO.
After telling Facebook CEO Mark Zuckerberg ‘no’ on purchasing Snapchat, Spiegel expects to hopefully raise at least 3 billion by going public. The company Snap, Inc. is said to be valued between $20 billion and $25 billion.
IPO (Initial Public Offering) is when a private organization like Snap, Inc. offers stock for the first time publicly. During its filing, Snap mentioned that sales from 2015 increased to $404.5 million and active users were up 48 percent for 2016. Snap made sure to clarify to future investors that the Snapchat application could be used in many different ways, such as becoming an advertising hub.
Most of Snap’s money comes from advertising on the application. Nearly 97 percent of Snap’s revenue comes from just advertising on Snapchat alone. Snap, Inc. hopes that by going public it will be able to keep long-term advertisement with other organizations. As for Spectacles, although popular amongst the young demographic Snapchat targets, it has not reported significant revenue for Snap.
Although Snap may not be earning large sums of profit, it’s not unusual to file for IPO. Having about 158 million daily active users, Snap hopes to use its target demographic to hopefully earn the revenue and expand. As mentioned in their filing, they plan to take risks if needed to create new innovative camera products that will work to improve experiences for users in the future.
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