Snapchat Rumoured to Have Filed its IPO
According to a recent news report by Reuters, Snapchat is progressing its plans to file an IPO and go public next year, with the confidential first stage paperwork now filed and in play.
If it goes ahead, Snapchat will be the latest in a line of companies who have chosen to take the confidential IPO filing route well in advance of sharing their financials as part of the formal progress. Why? Because this approach gives vital breathing space between the SEC’s receipt of the documentation and the stage where they become published – warts and all – for broader public consumption.
What is important to remember, however, is that filing of IPO documents doesn’t mean that the move to go public is about to happen immediately. Earlier reports suggested that March would be the first possible time that it could happen. However, it does show that Snapchat are committing to the process and working through the motions to make it happen.
How can they file confidentially? Because the JOBS act allows companies with under $1 billion in annual revenue to do this in the USA.
So, anticipation is now building and potential investors are no doubt getting interested. There are already 150 million Snapchat users who engage with the platform daily and it is already known for being a potentially huge marketing platform. Many also believe that Snapchat will be able to steal some market share from sites such as Facebook that have come under scrutiny for the ‘fake news’ scandal during the presidential election.
Snapchat is also looking set to be financially attractive, targeting up to $1 billion in revenue next year, according to leaked documentation – and up to $350 million in 2016. This happens as sites such as Facebook and Pinterest are looking a little less healthy on the financial front: Pinterest missed its earlier projected income targets, and Facebook has said that it is nearly at max advertising load, with growth likely to tail off.
With Snapchat now perfectly positioned to bag those advertising budgets, investors are likely to be giving it a serious once over. Early calculations suggest it will be valued at $20 – $25 billion. The company has declined to comment at this time.