Snap Inc., the maker of the Snapchat messaging app, has valued itself at between $19.5 to $22.3 billion. If that seems outrageous, note that it's actually less than previously expected:
The company, which filed for an initial public offering earlier this month, was widely expected to be valued at between $20 billion and $25 billion. However it said on Thursday it was targeting a valuation between $19.5 billion and $22.3 billion, ahead of an investor roadshow due to start on Monday in London.
The lower valuation range reflected initial investor feedback, as well as Snap's aim to ensure there is sufficient demand for shares of the company that it trades up on its first day in public market.
Investors have been poring over the filing for Snap's upcoming IPO to assess whether the still-unprofitable company will be the next Facebook Inc, which has figured out how to make money from its social media platform, or if it will be more like Twitter Inc, which is struggling to achieve the same goal.
You want to be a Facebook, not a Twitter.
Previously: Goodbye Snapchat, Hello Snap Inc
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(Score: 1) by khallow on Friday February 17 2017, @02:08PM
Yet time and time again we hear stories of companies imploding because they spent all their effort trying to appease investors at the cost of long term health.
This is yet another ugly failure mode of corporate share trading. It's like lending money to a business that has never made a profit, but without the bankruptcy priority that loans get. At least you get a chance to sell to another sucker.
(Score: 1) by khallow on Friday February 17 2017, @02:16PM
It's like lending money to a business that has never made a profit, but without the bankruptcy priority that loans get.
Or any sort of payment schedule. As long as Snapchat continues to lose money, there won't be any sort of dividend on these shares.