Snap has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). No pricing details were listed in the filing, but this offering is valued up to $3 billion, making it the largest IPO in a long time. The company intends to list its stock on the New York Stock Exchange under the symbol SNAP.
The underwriters for this offering are Morgan Stanley, Goldman Sachs, JPMorgan, Deutsche Bank, Barclays, Credit Suisse and Allen.
This company’s flagship product, Snapchat, is a camera application that was created to help people communicate through short videos and images. The company calls each of those short videos or images a Snap. On average, 158 million people use Snapchat daily, and over 2.5 billion Snaps are created every day.
Snap detailed in its filing:
Worldwide advertising spend is expected to grow from $652 billion in 2016 to $767 billion in 2020. The fastest growing segment is mobile advertising, which is expected to grow nearly 3x from $66 billion in 2016 to $196 billion in 2020. We believe that one of the major factors driving this growth is the shift of people’s attention from their televisions to their mobile phones. This trend is particularly pronounced among the younger demographic, where our Daily Active Users tend to be concentrated. According to Nielsen, people between the ages of 18 and 24 spent 35% less time watching traditional (live and time-shifted) television in an average month during the second quarter of 2016 compared to the second quarter of 2010.
The company intends to use the net proceeds from this offering for general corporate purposes, including working capital, operating expenses and capital expenditures. The firm may use a portion of the net proceeds to acquire complementary businesses, products, services or technologies. However, it does not have agreements or commitments for any material acquisitions at this time.
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