‘CHAT’ ABOUT AN IPO
Value up to $25B
Snapchat has filed to go public.
Snap Inc., the parent company of the fast-growing messaging app, has filed confidentially with the Securities and Exchange Commission for an initial public offering, according to a report on Tuesday.
The going-public deal, expected as soon as next March, could value the company at between $20 billion and $25 billion, according to Reuters, which first reported on the filing.
That’s down from earlier reports that a Snap IPO could value it at more than $25 billion.
Snap’s app — in addition to sending disappearing photos — broadcasts news segments and other “stories” compiled by big media companies.
The company told investors it was on track to generate between $250 million and $350 million in ad revenue this year.
Snap is reportedly on track to surpass that estimate, versus last year’s revenue of $60 million.
It aims to reap $1 billion in revenue in 2017. The company continues to lose money as its 26-year-old Chief Executive Evan Spiegel invests heavily in growth.
Companies with less than $1 billion in revenue can file for confidential IPOs to hide their financials — while testing the stock market’s appetite.
The process was made possible under the US Jumpstart Our Business Startups, or JOBS Act.
A spokesman for Snap Inc. declined to comment.
This month, Snap staged a publicity stunt when it began selling $130 pairs of vid- eo-shooting sunglasses, called Spectacles, in vending machines near its headquarters in Venice Beach, Calif.
The glasses are equipped with a camera that connects wirelessly to the user’s smartphone to take and send “snaps” — the company’s terms for video and photo messages sent on its app.
Snapchat started in 2012 as a free mobile app that did one thing: allow users to send photos that vanish within seconds.
It has more than 100 million active users, about 60 percent of whom are ages 13 to 24, making it an attractive way for advertisers to reach millennials.
Awash in venture funding, the company raised $1.81 billion in May, which valued it at about $20 billion, media reports said at the time.
But investors worry that Snapchat’s advertising sales, which began last October, are the company’s only significant revenue source.
Known for its white ghost logo, Snapchat claims on its Web site: “On any given day, Snapchat reaches 41 percent of all 18- to 34-year-olds in the United States.”