Snapchat’s parent company Snap Inc. has made its initial public offering, or IPO, filing public, setting in motion what could be the biggest tech flotation in years.
The Los Angeles-based company filed confidential paperwork for the IPO with the Securities and Exchange Commission last fall. Today it made those documents available to the public.
The company filed for a $3 billion IPO, though that is a placeholder amount and certain to change as the company sets a price on the deal.
Snap is expected to list shares in March, and could fetch a valuation of as much as $25 billion.
It plans to list its shares on the New York Stock Exchange under Snap.
Snap was able to file confidentially because it has annual revenue of under $1 billion. Now that its financial statements have been made publicly available, it must wait 15 days before holding formal meetings, or the IPO “roadshow,” with investors.
The company’s 26-year-old CEO, Evan Spiegel, will be the focus of the message that management conveys to investors in those meetings, people familiar with Snap’s roadshow planning have said. He will be framed as a visionary, similar to how Facebook CEO Mark Zuckerberg was depicted before that company’s flotation.
That Snap would go public has been a foregone conclusion on Wall Street and in Silicon Valley for months. The company last year added a seasoned IPO specialist to its board and then changed its name from Snapchat to Snap in a move that it said was meant to speak to potential public investors.
“You can search Snapchat or Spectacles for the fun stuff and leave Snap Inc. for the Wall Street crowd :)” the company said in a blog post in September.
Snap’s business is quickly evolving from the chat app that gave it its name. It has increased advertising and added news, and last year it began selling its Spectacles, eyeglasses that can take photos and record video.
Still, as Snap begins to meet with investors, it will need to explain what its total addressable market can be — outside of the millennial demographic it’s already popular with. It will also have to lay out a vision for how revenue can grow from less than $1 billion to many billions. And the angle Snap chooses in pitching itself to Wall Street will be important. The company’s recent foray into hardware and its new identity as a “camera company” could cause investors to value it differently than a pure-play internet company, where profit margins are typically higher.
More to come…
Alex Heath contributed reporting.