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Businesses The Almighty Buck Software Technology

Snapchat Files For IPO (reuters.com) 55

According to sources familiar with the matter, Snapchat has filed for an initial public offering (IPO) that could value the company at $25 billion, making it the largest IPO since Chinese e-commerce giant Alibaba Group went public two years ago. Reuters reports: Snapchat filed with the Securities and Exchange Commission under the U.S. Jumpstart Our Business Startups Act. Companies with less than $1 billion in revenue can secretly file for an IPO, allowing them to quietly test investor appetite while keeping financials confidential. A Snapchat IPO is seen by many investors as a bellwether for many of the largest so-called "unicorns," private, venture-backed companies that are valued at more than $1 billion. Nicknamed "decacorns," these companies are valued in the tens of billions of dollars and include Snapchat, car-sharing company Uber Technologies Inc and home-sharing company Airbnb. No decacorn has yet tested the public market, and it is unproven whether they can beat or even replicate such astronomic valuations with more scrutinizing public investors. Snapchat started in 2012 as a free mobile app that allows users to send photos that vanish within seconds. It has more than 100 million active users, about 60 percent of whom are aged 13 to 24, making it an attractive way for advertisers to reach millennials.
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Snapchat Files For IPO

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  • it's started.
  • Bubble hey-oooo! (Score:4, Insightful)

    by Anonymous Coward on Tuesday November 15, 2016 @09:15PM (#53293791)

    Dot Bomb 2.0 here we come!!!

  • warning (Score:5, Funny)

    by kiviQr ( 3443687 ) on Tuesday November 15, 2016 @09:16PM (#53293799)
    Your investment may be short-lived and self-deleting.
  • Teenagers and students, lots of cash to spend on advertisers products...
  • by Frosty Piss ( 770223 ) * on Tuesday November 15, 2016 @10:27PM (#53294111)

    The beginning of the end. Make a lot of cash on the IPO, cash-out to ???

  • by Anonymous Coward

    Isn't the whole point of going public to help expand the business into new areas of development? WTF does snapchat need to do that? It's a fucking IM app with auto del gimmick.

    25Billion, wtfLOL

    Seems like a tax avoidance scheme most likely on the horizon with lots of short winfalls to boot.

    • by reanjr ( 588767 )

      That's one reason to go public. Many companies (especially in Silicon Valley) go public to provide a payout to the VCs and founders. Best case scenario, the IPO is properly priced, everyone gets paid, and the public has an investment that is worth something.

  • by Anonymous Coward

    Maybe it's because I'm "old" at least by using the internet standards. But how are any of these chat programs worth anything? IRC, AOL instant messenger, whatever the MSN one was called. They all get replaced so easily, and this generation will probably meet the same fate, it's like saying G-mail is worth billions because it has "so many users!" Is it just a cash in on inept investors?

    • whatever the MSN one was called

      We used to just call it MSN...

      Also, you forgot ICQ, where IIRC if someone received enough warnings from other users they would be kicked off for a while. A chat program that can put you on timeout for being an ass-hat would be worth something!

  • I'm confused. I've heard of Snapchat. I don't use it. Are you sure you didn't mean $25,000,000 IPO?
    • by Dutch Gun ( 899105 ) on Wednesday November 16, 2016 @01:22AM (#53294649)

      That just means you're probably older than 25. You probably still use e-mail too.

      I think most adults don't use it, but know all the young people use it, so all the money men figure it's the Next Big Thing(tm), and are overvaluing it because they don't want to miss out on the Next Big Thing(tm), even though no one has a damn clue how anyone is going to actually make money from it, let alone $25B of revenue from it. But they know it's going to be BIG.

      Same as Twitter, I think, although I have a feeling as soon as everyone figures out that no one actually wants to *buy* it as its current price, we're going to see a little air let out of that balloon.

  • by Anonymous Coward

    So they have 100M active users. At $25B they're valuing the company at $250 per user. That seems at least a couple of orders of magnitude too high!

    • Agree, but let's try to run some numbers:

      If every user is worth $250 in ad revenue, they'll have some work to do. Let's say an ad-click pays Snapchat 10 cent. Then every user would have to make 2500 ad clicks. If each user clicks 2 ads per day, it will take a bit less than four years to reach $250 per user.

      However, for each ad a user clicks, he will ignore many. Let's say the click-through-rate is 1%. So to get 2 clicks per day, he'll have to be exposed to 200 ads per day. Assuming a normal person is awake

  • Did we learn nothing from the .com bubble?

  • >Decacorn

    Wtf, what a retard invents such lingo?

  • by ErichTheRed ( 39327 ) on Wednesday November 16, 2016 @10:31AM (#53296357)

    It's definitely nearing the top of the bubble again. I'm not totally surprised Snapchat is trying to desperately IPO and get their founders cashed out before everything pops. Maybe they've learned something from history -- the late 90s was full of companies whose sole strategy was to rush a website or e-commerce offering out, then IPO or convince an established company to buy them out. Or, maybe they saw Twitter couldn't sell itself to anyone and want to hurry up and get their money out.

    Everything "consumer social" is pretty saturated these days by Facebook and Twitter, so maybe it's a strategy to convince Facebook to buy them rather than actually going through with the IPO. The next big mini-bubble is "workplace social" -- Slack and Atlassian are all over that one and there are going to be billions wasted before people figure out that very few non-hipsters (in any age bracket) want a mash-up of Facebook and SharePoint as their primary work tool.

    I think the big difference about this bubble is that it's going to last a longer time and sort of deflate slowly rather than pop. Ironically, that's because of cloud computing. These bubble companies are running on Amazon or Google or Microsoft cloud infrastructure and they don't have fixed costs like the late 90s dotbombs did. They don't have to buy a data center and servers -- the VC money is being used to rent them from providers. Companies can live a lot longer when there's no fear of a hard stop when you simply run out of money. It's too bad, because there was a ton of infrastructure items on the eBay market from bankruptcy sales last time around...not this time!

    • so maybe it's a strategy to convince Facebook to buy them rather than actually going through with the IPO

      Snapchat has already rejected a couple of buyout offers from FB. IIRC, what they turned down was similar to the total IPO amount.

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