As you may have heard by now, everybody’s favorite picture sharing app is going public to the tune of billions – $22 billion, to be exact. If you’re saying to yourself “my, that sounds like a ton of money!” you’d be correct in doing so. The highest IPO of all time is held by Alibaba, a popular international online marketplace company, at $25 billion. Their IPO, however, began at $21.8 billion and reached its final mark only after underwriters, entity that administers the public issuance and distribution of securities from a corporation, exercised an option to sell more shares. With this being said, we shouldn’t count Snap Inc.’s $22 billion is set in stone just yet.
Actually, it seems as if the best has yet to come, as the company stated (in a filing with the SEC) that it could increase its valuation range if it sees strong demand for its stock.
Snap Inc. has yet to announce an official date for its initial offering, but sources have made mention that the outing is to be expected in March, under the ticker symbol SNAP (NYSE).
The IPO would bring in a ton of revenue for the company, allowing it to make further purchases it believes to need. This past December, SNAP got under the covers with the augmented reality field, purchasing Israeli start-up, Cimagine Media, for $40 million.
The question here, and for prospective shareholders, is whether or not the proposed $14-$16 value per share is going to hold up over time. Much of the draw to Snapchat thus far has been the mystery surrounding it. How do they make their money? Being one of the questions many ask of the company. If there is no stable revenue generator, of course, a business is bound to fail, but the potential for Snap Inc. seems to outweigh these concerns for most; and its early IPO valuation speaks for that.