Snapchat is one of the biggest favorite apps in the social media universe at the moment. Its founders Evan Spiegel and Bobby Murphy filed confidentially to go public with SEC late last year, and now they are ready to be traded on the New York Stock Exchange under the ticker SNAP.
Snap`s revenue rose to $404,5 million, which is eight times higher than their revenue in 2015. In Q4 Snap had 158 million daily active users (up 48%), and many of my friends and family members are one of them. 2,5 billion Snaps are created every day.
Snap Inc is a camera company, and in the SEC filings they say: “We blive that reinventing the camera represents our greatest opportunity to improve the way people live and communicate.
Our products empower people to express themselves, live in the moment, learn about the world, and have fun together».
Worldwide advertising spend is expected to grow from $652 billion in 2016 to $767 billion in 2020. The fastest growing segment is mobile advertising, which is expected to grow nearly 3x from $66 billion in 2016 to $196 billion in 2020.
Snap belive that one of the major factors driving this growth is the shift of people`s attention from their televisions to their mobile phones. According to Nielsen, people between the ages of 18 and 24 spent 35% less time watching traditional television in an average month during the second quarter of 2016 compared to the second quarter of 2010.
A huge difference between Facebook at Twitter is that Snap Inc doesnt have their own server farm, which makes it more expensive which means Snaps earnings can look much lower that those who have their own server farm.
Snap Inc lost $514 million in 2016, which is up from about $373 million. Some of that money goes to Google because Snap Inc rents storage and server space from them. New legislation that would change U.S, or foreign taxation of international business activities or other tax-reform policies could also seriously harm their business.
Benchmark Capital owns about 10% og the company. Lightspeed Venture Partners owns 8,3%, and Institutional Venture Partners owns 4%.
Snap are looking to raise up to $3 billion, and Snaps offering is being led by Morgan Stanley and Goldman Sachs. Morgan Stanley won the desired «lead left» position on the prospectus. The bank also led Facebooks initial public offering.
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