Snap Inc. has surprised an entire world with its capacity to catch up with the largest social media giants in a short span of time. However, probably the biggest moment of the image messaging application is going public. On the first day of March, Snap Inc. is going to do a Wall Street debut after the close of the market. Experts are excited for the event as it is expected to become the largest IPO recorded in the last two years.
On Monday, in the wake of its Wall Street debut, Snap Inc. announced that the company expects investors to abstain from selling their shares for an entire year. The social media app is going to start with a $3.2 billion as its initial public offering. This announcement marks how confident the company is on its IPO which is expected to be the largest since Facebook Inc. To obtain such funds, Snap hopes for its shares to be valued between $14 and $16.
If everything goes according to plan, the two founders of Snapchat, Evan Spiegel, and Bobby Murphy are going to become billionaires at an early age of 27. The chief executive officer and the chief technology officer of the company were just students six years ago when they came up with a new social media concept based on a transient nature.
This young social media platform managed to find great ways of monetization, unlike Twitter. Social users can see sponsored content at the top of their feed and also during stories. They have the option to skip the advertisements if they don’t want to see them. On the other hand, publishers understood that Snapchat is about having a great and goofy time. Thus, they made it a priority to apply a different marketing approach for this platform. This is why users usually don’t skip the ads, as they are fun, short, and on point. As a consequence, the revenue of the company increased from $59 million in 25 to $404.5 million in just one year.
On the other hand, even though the earnings were big, the net income was barely existent. This means that the company has a huge potential and lots of spare room to grow, yet without investments, Snapchat would vanish into thin air. The organization chose to redirect funds to marketing, data storage, and 2,000 employees. Another turn off for investors in the public offering can be the fact that they will have no voting rights. Only the two founders will have a saying in how the company is going to evolve and overcome challenges.
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