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Snapchat overtakes Twitter for biggest social media IPO

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Snapchat’s parent company, Snap Inc., has officially filed paperwork to begin its’ initial public offering, which is expected to raise over $3 Billion. The popular picture-based app will only sell non-voting shares once it goes public on the New York Stock Exchange, where it will trade under the symbol “SNAP”. Originally created in 2011, Snapchat has grown to become a heavy-hitter in the social media world, and hopes to expand its business and profitability by becoming a publicly listed company.

snapchat smartphone, social media
snapchat smartphone

One of the largest and more popular social media applications in the world, with over 2.5 billion snaps created daily amongst its 158 million users, the company is following the lead of several other platforms, like Facebook and Twitter, into the stock market.

However, unlike its other colleagues, Snapchat has plateaued, and seems to have peaked in terms of user growth. Prior to its IPO, the company has struggled to post a profit, suffering losses of $515 million in 2016 and $373 million in 2015.

That being said, Snapchat hasn’t backed away from its’ poor record, acknowledging its’ shortcoming in its’ filling:

“We have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability […] for all of our history, we have experienced net losses and negative cash flows.”

Many are beginning to compare Snapchat’s foray into the market to Twitter’s. The communication giant also had a large initial IPO, but failed to gain traction and continued to post losses in its’ profits column. However, Snapchat’s overall success and interface has led to several other social media platforms trying to clone its’ features, peaking with Facebook’s attempt to acquire the company in 2013 for an estimated $3 Billion.

Although the company is looking to build upon its’ platform through becoming a publicly listed business, it has explained that it expects some blowback, based off of how previous social media IPOs have been greeted by investors. However, there are some who think Snapchat could be one of the most successful IPOs of the bunch, as Hardt analyst James Cakmak explained to CNN:

“Since they’ve managed to successfully change the way advertisers think, investors should be an easier sell,” Cakmak says, before adding a caveat: “So long as the growth curve remains steep.”

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