Video Sharing Company Snapchat To Go Public With IPO Worth $20 Billion

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Snapchat IPO: Video Sharing Company Snapchat To Go Public With IPO Worth $20 Billion

Makers of Snapchat video and image sharing app, Snap Inc., may soon be worth more than $20 billion.

Snap Inc, the company that brought you disappearing messages and puking rainbow filters is working out an IPO worth close to $20 billion.

According to a company filing on Thursday, Snapchat’s parent company is looking to price its upcoming initial public offering at between $14 and $16 a share.

At the end of the Snapchat IPO, Snap Inc would have a market value of more than $22 billion.

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Snap would also be the biggest U.S. tech IPO since Facebook which went public in 2012 with a $104 billion valuation.

The Snapchat IPO would be almost double the value of Twitter which currently has a market capitalization of about $12 billion.

The pricing is not final, but it’s the clearest indication yet that Snap is seeking a lofty valuation despite investor concerns.

According to the company filing, Snap will be using part of the IPO proceeds to acquire complementary businesses.

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The statement said:

“We may also use a portion of the net proceeds to acquire complementary businesses, products, services, or technologies.

“However, we are not contemplating any material acquisitions at this time.”

Snapchat IPO To Raise $20 Billion

According to Snap Inc’s original IPO filing earlier this month, the young company saw user growth slow to a halt in the second half of 2016.

The slowdown seems connected with Facebook’s Instagram launching a Snapchat-like feature which allows video calling.

Snap’s sales are growing at a fast pace, rising to more than $400 million in 2016 from just $58.7 million in 2015.

Most analysts expect Snap to report around $1 billion in sales this year.

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That would mean Snap hopes to be valued at more than 20 times its sales.

Although Snap continues to struggle to make money — signalling that it may not be turning a profit any time soon.

Snap Inc suffered losses of $515 million in 2016, up from a loss of $373 million the year before.

The company could end up raising close to $3.7 billion from the public offering if it prices at $16 per share.

Those funds would give Snap greater ability to compete for talent and acquisitions against larger Tech companies like Facebook.