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http://www.forbes.com/sites/kathlee...lion-pricing-shares-at-14-to-16/#384384e77aa0
Snap Inc., which created the popular messaging app Snapchat, said in a regulatory filing on Thursday that it plans raise up to $3.2 billion in an initial public offering that would value the company at between $16.2 billion to $18.5 billion.
The company said it plans to price its shares between $14 and $16.
On a fully diluted basis, which accounts for stock options and convertible shares, Snap’s valuation is set to fall between $19.2 billion and $22.2 billion, according to a recent report in Bloomberg News. The valuation is considerably lower than the $20 billion to $25 billion Snap had reportedly been seeking, likely indicating concerns among investors about the company's slowing user growth.
(Credit: Holly Warfield, FORBES Staff)
Snap said in its filing with the Securities and Exchange Commission that it plans to sell 200 million class A shares on the New York Stock Exchange under the ticker symbol SNAP. Morgan Stanley MS -1.33% and Goldman Sachs are the lead underwriters.
The class A stock being sold doesn’t contain any voting rights, making Snap the first U.S. IPO to issue non-voting shares. Owners of class B stock are entitled to one vote per share, which can be converted into a share of class A stock. And holders of class C stock, which is only held by Snap’s cofounders CEO Evan Spiegel and CTO Bobby Murphy, are entitled to 10 votes per share. After the IPO, the class C stock will represent 88.5% of the voting power, meaning outside stockholders won’t have any control over matters that come before the board of directors.
"Mr. Spiegel and Mr. Murphy, and potentially either one of them alone, have the ability to control the outcome of all matters submitted to our stockholders for approval, including the election, removal, and replacement of directors and any merger, consolidation or sale of all or substantially all of our assets," Thursday’s filing said, noting that Spiegel and Murphy will retain their voting rights even if they no longer work for Snap.
Snap, known as much for its devoted following among millennials as for its secrecy, said in its S-1 filing earlier this month that it had a net loss in 2016 of $515 million, which widened from a net loss of $373 million a year earlier. Revenue increased sixfold from $58.7 million in 2014 to $404.5 million last year. For more details of its financials, users and other metrics, see this story.
Snap, whose road show will take place in the second half of February, intends to begin trading on Wednesday, March 1, according to a report in Business Insider.
Snap said it plans to use the IPO funding for "general corporate purposes, including working capital, operating expenses, and capital expenditures,” according to the filing. The company also said it is not “anticipating any material acquisitions” but may purchase some “complementary businesses, products or technologies.” Snap has raised about $2.7 billion in total funding to date from investors such as General Catalyst, IVP, Coatue Management and Benchmark. Snap's latest private funding round valued the company at about $18 billion.
Snap’s roadshow, in which the company meets with investors to explain its strategy and vision, is expected to include Spiegel, chief strategy officer Imran Khan and CFO Andrew Vollero. Snap’s valuation range could rise over the course of its road show depending on demand from investors.
The roadshow is expected to take place from Feb. 17 to Feb. 28, according Business Insider's report, beginning in the Mid-Atlantic before going to London, New York, Boston, the Midwest and San Francisco. Investors will likely be eager to hear more details about how Snap plans to find a path to profitability in the competitive advertising landscape.
Of the 200 million class A shares listed, Snap said it will sell 145 million. The remaining shares will be sold by investors and employees. Snap cofounders Spiegel and Murphy each plan to sell 16 million class A shares, which could be worth up to $256 million after the IPO, according to Thursday’s filing. Snap director and chairman Michael Lynton is set to sell 54,907 shares for as much as $878,512, while Snap investors Lightspeed Venture Partners plan to sell 4.6 million shares for as much as $74 million and General Catalyst plans to sell 572,904 shares for as much as $9.2 million.
Snap is on track to be the largest initial offering on a U.S. exchange since China-based Alibaba Group raised $21.8 billion in 2014 at a $168 billion valuation. By comparison, Facebook FB +0.02% had 900 million users when it made its rocky debut on Nasdaq in 2012 at a $104 billion valuation. And Twitter TWTR -0.84% had 200 million users when it went public in 2013 at a $24 billion valuation. Since, Facebook’s valuation has skyrocketed to $382 billion and Twitter’s has roughly halved.
Snap competes for mobile phone time with a host of social apps, particularly Facebook and its photo-and-video app Instagram, which have 1.9 billion monthly users and 600 million monthly users, respectively. This summer, Instagram launched a successful clone of Snapchat's pioneering "Stories" feature. Facebook also plans to widely incorporate stories into its app. Among investors, Snap has been said to emphasize engagement metrics, such as total time spent and the number of messages sent, instead of the size of its user base. The company is also reportedly focused on boosting revenue per user, not on becoming globally ubiquitous. By contrast, Facebook, is making a concerted push to be widely used everywhere, including emerging markets.
Spiegel’s vision for the company remains somewhat mysterious. Snapchat rebranded itself as Snap in September, indicating that its focus won’t be confined to messaging. The company moved into hardware late last year with Spectacles, sunglasses with a built-in camera that can take and share short video clips.
Snap Inc., which created the popular messaging app Snapchat, said in a regulatory filing on Thursday that it plans raise up to $3.2 billion in an initial public offering that would value the company at between $16.2 billion to $18.5 billion.
The company said it plans to price its shares between $14 and $16.
On a fully diluted basis, which accounts for stock options and convertible shares, Snap’s valuation is set to fall between $19.2 billion and $22.2 billion, according to a recent report in Bloomberg News. The valuation is considerably lower than the $20 billion to $25 billion Snap had reportedly been seeking, likely indicating concerns among investors about the company's slowing user growth.
(Credit: Holly Warfield, FORBES Staff)
Snap said in its filing with the Securities and Exchange Commission that it plans to sell 200 million class A shares on the New York Stock Exchange under the ticker symbol SNAP. Morgan Stanley MS -1.33% and Goldman Sachs are the lead underwriters.
The class A stock being sold doesn’t contain any voting rights, making Snap the first U.S. IPO to issue non-voting shares. Owners of class B stock are entitled to one vote per share, which can be converted into a share of class A stock. And holders of class C stock, which is only held by Snap’s cofounders CEO Evan Spiegel and CTO Bobby Murphy, are entitled to 10 votes per share. After the IPO, the class C stock will represent 88.5% of the voting power, meaning outside stockholders won’t have any control over matters that come before the board of directors.
"Mr. Spiegel and Mr. Murphy, and potentially either one of them alone, have the ability to control the outcome of all matters submitted to our stockholders for approval, including the election, removal, and replacement of directors and any merger, consolidation or sale of all or substantially all of our assets," Thursday’s filing said, noting that Spiegel and Murphy will retain their voting rights even if they no longer work for Snap.
Snap, known as much for its devoted following among millennials as for its secrecy, said in its S-1 filing earlier this month that it had a net loss in 2016 of $515 million, which widened from a net loss of $373 million a year earlier. Revenue increased sixfold from $58.7 million in 2014 to $404.5 million last year. For more details of its financials, users and other metrics, see this story.
Snap, whose road show will take place in the second half of February, intends to begin trading on Wednesday, March 1, according to a report in Business Insider.
Snap said it plans to use the IPO funding for "general corporate purposes, including working capital, operating expenses, and capital expenditures,” according to the filing. The company also said it is not “anticipating any material acquisitions” but may purchase some “complementary businesses, products or technologies.” Snap has raised about $2.7 billion in total funding to date from investors such as General Catalyst, IVP, Coatue Management and Benchmark. Snap's latest private funding round valued the company at about $18 billion.
Snap’s roadshow, in which the company meets with investors to explain its strategy and vision, is expected to include Spiegel, chief strategy officer Imran Khan and CFO Andrew Vollero. Snap’s valuation range could rise over the course of its road show depending on demand from investors.
The roadshow is expected to take place from Feb. 17 to Feb. 28, according Business Insider's report, beginning in the Mid-Atlantic before going to London, New York, Boston, the Midwest and San Francisco. Investors will likely be eager to hear more details about how Snap plans to find a path to profitability in the competitive advertising landscape.
Of the 200 million class A shares listed, Snap said it will sell 145 million. The remaining shares will be sold by investors and employees. Snap cofounders Spiegel and Murphy each plan to sell 16 million class A shares, which could be worth up to $256 million after the IPO, according to Thursday’s filing. Snap director and chairman Michael Lynton is set to sell 54,907 shares for as much as $878,512, while Snap investors Lightspeed Venture Partners plan to sell 4.6 million shares for as much as $74 million and General Catalyst plans to sell 572,904 shares for as much as $9.2 million.
Snap is on track to be the largest initial offering on a U.S. exchange since China-based Alibaba Group raised $21.8 billion in 2014 at a $168 billion valuation. By comparison, Facebook FB +0.02% had 900 million users when it made its rocky debut on Nasdaq in 2012 at a $104 billion valuation. And Twitter TWTR -0.84% had 200 million users when it went public in 2013 at a $24 billion valuation. Since, Facebook’s valuation has skyrocketed to $382 billion and Twitter’s has roughly halved.
Snap competes for mobile phone time with a host of social apps, particularly Facebook and its photo-and-video app Instagram, which have 1.9 billion monthly users and 600 million monthly users, respectively. This summer, Instagram launched a successful clone of Snapchat's pioneering "Stories" feature. Facebook also plans to widely incorporate stories into its app. Among investors, Snap has been said to emphasize engagement metrics, such as total time spent and the number of messages sent, instead of the size of its user base. The company is also reportedly focused on boosting revenue per user, not on becoming globally ubiquitous. By contrast, Facebook, is making a concerted push to be widely used everywhere, including emerging markets.
Spiegel’s vision for the company remains somewhat mysterious. Snapchat rebranded itself as Snap in September, indicating that its focus won’t be confined to messaging. The company moved into hardware late last year with Spectacles, sunglasses with a built-in camera that can take and share short video clips.
