Today is the day the tech world has been anxiously awaiting for months: five months years after the initial launch of the ever-loved app Snapchat, Snap has filed for IPO – at a staggering $3 billion.
The ticker symbol was chosen as “SNAP” as the company filed on the New York Stock Exchange today. They are planning to raise $3 billion at a valuation of $25 billion, according to Business Insider.
This is an intriguing endeavor for Snapchat at this point in time – although they claim to have 158 million daily active users, they also reported in their S-1 filing that “We have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability.” Revenue is also a problem, as Snapchat lost $372.9 million in 2015 and $514.6 million in 2016 – meaning that they actually lost more money than their total revenue for the two years ($58.7 million in 2015 and $404.5 million in 2016).
Interestingly enough, Snapchat’s users are also declining. This TechCrunch article, published just earlier this week, explains how there has been a decline in the usage of Snapchat Stories since Instagram Stories launched. According to the CEO of a social content production firm quoted in the piece, there has been “an average decline in Snapchat Stories views of 20 to 30 percent from August until mid-January.” Nick Cicero, CEO of Delmondo, explains that “Overall, from August to November 2016, the average unique viewers per Snapchat Story has decreased about 40%.” In sum – Snapchat usage seems to be falling.
With this IPO now on the books in a current atmosphere of heavy competition between social media platforms like Snapchat, Instagram and Facebook, we’re curious to see how this plays out.