The Snap, the company that owns the social network Snapchat, will make his debut in the stock market and has submitted yesterday the first Initial Public Offering (IPO) on the New York Stock exchange, with which you can raise up to three billion dollars.
according To the Financial Times (FT), an IPO of this size can give the company a valuation of up to $ 25 billion – to verify, the highest level since the china’s Alibaba, which in 2014 went on the stock exchange with a capitalization of 168 billion dollars. 25 billion could accrue if entry on the stock exchange is successful, a bonus of us $ 750 million.
The co-founder and current CEO of Snap, Evan Spiegel, will retain a participation in the amount of us $ 5.5 billion. Robert Murphy, co-founder and CTO, will have a stake of equal value. Both will continue to ensure the control of the company – to confirm, this IPO may be the first to issue non-voting shares.
according To the documentation related to the OPI, which the international press had access, the social network saw its advertising revenues to multiply by seven in the fourth quarter of 2016, for a total of 404,5 million dollars. The average revenue per user was, in the same period, of 1.05 dollars – a year before it was only 0,31 dollars. In North America, the value amounts to eur 2.15 dollars. Less positive were the losses of the 515 million dollars in 2016, well above the value of 2015: 373 million dollars.
The offering will be managed by the banks Morgan Stanley and Goldman Sachs.
the risks of The OPI
according To the FT, there are several risk factors the condition the OPI of the Snap. In the first place, the paper highlights the impact of Brexit, in addition to the competition from the giants technology like Apple, Facebook, Google and Twitter, and other less known, such as the Cocoa, the Line, the Naver and Tencent. Another risk factor is the fact that the infrastructure of the Snapchat be dependent on the Google Cloud.
THE OPI can be made more difficult by the fact that the Snap you have never generated a profit and be able to never come to generate or, if you are able, be unable to maintain profitability. The FT highlights the potential difficulty in finding replacements for the founders, whose positions already were threatened, and some gaps in terms of security.
The usage metrics, the rapid increase in costs and media coverage unfavorable are also risk factors.