Snapchat app maker Snap Inc. filed papers Thursday to move forward with what’s expected to be the biggest initial public offering ever for a Los Angeles company.
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As Snap Inc. moves toward its hotly anticipated initial public offering, its finances will inevitably be compared with those of other social media giants like Facebook and Twitter, which filed for IPOs in 2012 and 2013, respectively.
Here’s now Snap stacks up on several key metrics sure to be scrutinized by investors.
Daily active users: This measures the number of users that opened the app or used the service in a 24-hour period.
Revenue: This measures how much money the company brought in the fiscal year before the IPO filing.
Percentage of revenue from advertising: They’re called social media firms, but really they are advertising platforms — Snap Inc. especially.
Profit/losses: It’s not uncommon for tech firms to enter public markets while still in the red. Out of these three, Facebook was the only one to post a profit before its IPO.
Conceived six years ago by Stanford University fraternity brothers as a silly online service to send photos that would disappear without saving, Snapchat has become a force in technology, advertising and entertainment. Here’s how it happened.
Evan Spiegel is a prized commodity — and his company’s filing on Thursday with the Securities and Exchange Commission proves it.
Snap Inc. spent $890,399 in 2016 on personal security costs for its co-founder, the document shows.
The spending was revealed in a section of the firm’s S-1 filing detailing compensation for Spiegel, who is known to travel between his firm’s beach-community offices in a black SUV.
Snap may have good reason for the expenditure. Among the risks the company said is the potential loss of Spiegel and co-founder and Chief Technical Officer Bobby Murphy.
“Mr. Spiegel and Mr. Murphy are high profile individuals who have received threats in the past and are likely to continue to receive threats in the future,” the filing states.
And it doesn’t look like Snap will scale back its security spending soon: It’s hiring for two full-time security jobs in Los Angeles, according to its website. Qualified candidates must have “physical security, risk management or law enforcement experience …” as well as “an ability to assess, understand and mitigate threats to the company and people while not stifling creativity and fun.”
What is Snap Inc.? A camera company — huh?? We break it all down for you.
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A Form S-1 isn’t often a place to look for colorful language. The paperwork required by the Securities and Exchange Commission is where companies looking to go public disclose all their finances.
Still, Snap Inc. found a way to include the word “poop” in its filing — a long-awaited 120,000-word pitch to ordinary investors.
The word shows up in a section about why Snapchat is a powerful advertising tool.
“Advertising is more effective and less wasteful when paired with the right contextual understanding. Smartphones can achieve this because they are personal in a way that other forms of media will never be — we eat, sleep, and poop with our smartphones every day,” the filing said.
No stranger to things that typically occur behind closed doors, Snap also made a point to dismiss the notion its app is mostly for sending explicit images.
“When we were just getting started, many people didn’t understand what Snapchat was and said it was just for sexting, even when we knew it was being used for so much more,” the filing said.
For the record, neither “poop” or “sexting” show up on the SEC’s database for other filings, which dates to 1994.
Conceived six years ago by Stanford University fraternity brothers to help peers send photos that would vanish after viewing, Snapchat roared through high schools and colleges, starting in Orange County. When the app hit 40,000 users in months, its co-founders knew they held a treasure.
Now, according to Thursday’s IPO filing, it boasts 158 million daily active users — and sources familiar with the matter say Snap’s stock sale could generate up to $4 billion. with shares priced to value the company at upward of $25 billion.
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