Snap Inc. Going Public
Evan Spiegel, CEO of Snap Inc, has hinted for almost two years that the millennial-driven company who owns Snapchat will eventually join the ranks of companies on the stock market. It looks like that time is almost here.
An insider of the company Snap Inc. reported that the company filed to become public on November 15, and the transition could occur as early as March of 2017. Morgan Stanley and Goldman Sachs Group Inc. are predicted to be lead underwriters of a Snap IPO, but no sources have confirmed these allegations due to a confidentiality law for companies who create under $1 billion in revenue. Snapchat’s IPO (initial public offering) is estimated to be around $25 billion, which is one of the largest IPOs in the technology industry.
Snap Inc’s decision to go public was prompted by a realization that their ad marketing was too difficult to manage under their current system of funding. Many of Snap’s marketing partners have voiced frustration with the manner in which Snapchat runs their ads, which affects Snapchat differently as a private entity than it would if they were a public company. Ad restrictions upheld by Snapchat are no longer as stringent as they once were because ads are reviewed by a Snap Inc. team, despite its glaring inefficiency.. There is little in the way of formal regulation, which is difficult both for the teams who are approving the ads and the clients who are submitting the ads.
Because most of Snapchat’s revenue comes from advertisements, it is imperative that they refine their system. This year, they are projected to make $367 million in advertisements alone and up to $1 billion by 2017. Snapchat’s entry to the public market stands to create a large enough domain to become the number one technology company in the United States.
Snapchat is at the forefront of social media for millennials. If you want to reach out to this generation of consumers, you have to communicate with them in a way they’ll understand. Investing in Snapchat now means being a part of the largest social media platform since email, and that can only bring benefit to your business.