Will Going Public Be a Kiss of Death to Snapchat?
Technology companies that have been able to secure a stable user base have been able to turn their private companies into large-scale, public corporations.
Snapchat is scheduled to take their company public in the near future, and estimates for the valuation are currently close to $20 billion.
In perspective, Facebook first went public with a valuation over $100 billion. That translates into Snapchat having 1/5 overall value in comparison to Facebook when it first started selling stock in 2012.
CNN Money reported: ‘At this level, Snapchat is a far cry from Facebook, which had 1.23 billion daily users in the December quarter. Instead, it’s much closer to Twitter, with an estimated 140 million daily users last year. (Twitter only reports monthly active users).’
They also noted in 2016 Snapchat reported to have had 158 million daily active users in the fourth quarter. This is up 48% from the fourth quarter in 2015, according to the company’s IPO filing. In contrast, Snapchat’s growth from the previous quarter slowed to a halt.
Bloomberg Technology noted: ‘Snap posted a net loss of $514.6 million in 2016, which widened from $372.9 million a year earlier. Still, revenue growth is a bright spot, climbing about sixfold to $404.5 million from $58.7 million in the same period.’
Overall, Snapchat might be a short-term win, it could be a long-term win. The company going public may be the weight that takes itself down with financially.
Browse over the coverage for the upcoming Snapchat IPO on YouTube.