Barclays, Credit Suisse, and Allen & Co. are also involved. Snap’s valuation range could rise over the course of its road show depending on demand from investors.
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In terms of awards for tech company founders, Spiegel’s grant rivals only the 120 million stock options Facebook gave founder Zuckerberg in 2005.
“Self-expression isn’t a contest”, Spiegel said. A month earlier, that range was closer to $25 billion to $35 billion, people familiar with the matter said, with one suggesting it could be as much as $40 billion. Snapchat noted that its active users weren’t increasing outside of the USA, where Android is the most used platform in smartphones. It has struggled to make any semblance of profit, despite having around 150 million active daily users.
In total, Snap is looking to raise up to $3.2 billion from the IPO. The logic is that advertisers want to reach North America and develop Europe rather than rest of world.
Snap’s highly anticipated IPO would be the largest since China’s Alibaba Group went public in 2014.
Still, Snap proponents argue a more limited user base lends it more loyalty and opportunity for the company to make money.
Snapchat is increasingly facing competition from the likes of Instagram and its new Stories feature, and with the company in need of something big and new to keep customers engaged talk has turned to the idea of a Snapchat smartphone. Revenue hit $404.5 million previous year, a sevenfold increase from 2015 fueled by growth in ad sales. It plans to list on the NYSE under the symbol SNAP. If the company’s business invariably heads south, stockholders have no recourse. However this may not be as much as it could have generated, as Snapchat is not selling off any shares that confer voting rights. Regulatory filings didn’t specify what would happen to the undelivered shares if Spiegel left before they’d all been handed over. “If Mr. Spiegel’s or Mr. Murphy’s employment with us is terminated, they will continue to have the ability to exercise the same”.
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Twitter’s user growth pales in comparison to that of SNAP. It’s also set to be the first US listing from that industry this year, according to Bloomberg data.
