Snapchat is making waves since officially filing for an IPO on 2nd February, 2017. The popular photo messaging app’s owners (Snap Inc.) are seeking a valuation of $25 billion, potentially making it the biggest IPO to date. The financial performance of Snap in 2016 is hard to ignore.
- 600% Sales Growth Rate – $404.5 million in 2016 compared to $59 million in 2015.
- Advertising Revenue – 98% of Snapchat’s revenue in 2016 came from advertising.
- Forecast - Bloomberg projects Snapchat will generate $1.76 billion in revenue by 2018.
Despite the impressive growth rates, it needs to be mentioned that Snapchat is still losing money. The 5-year-old company lost $514 million in 2016. Stay in the loop with regards to this important IPO.
Snapchat is considered to be the top platform amongst the young masses. Here’s why:
- Over 158 million daily active users (accurate for Q4 2016).
- Majority of Snapchat users belong to the ultra-young 18 to 34 age-group.
- Average daily usage time is estimated to be almost 30 minutes!
Here are 3 important things you need to know on the business side:
- Snap uses Google Cloud (GOOG) for its technical computing needs. Snap has also committed to spending $2 million with Google Cloud over the next 5 years.
- The company, mainly based in the USA, had 1,859 employees in 2016.
- Facebook Inc. (FB) and Twitter (TWTR) are considered its biggest rivals.
February 16th, 2017
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What is it?
An Initial Public Offering (IPO) refers to the first time that the stock of a private company is offered to the public. Often issued by emerging companies with plans to expand, IPOs are a good way to raise capital. They also allow large privately owned companies to become publicly traded.
Once a company enters this process, it stops being a private company and instead becomes a publicly-listed company on the relevant stock exchange. This effectively means it must make its accounts public and share growth and earnings statements.
Trading always carries risks, but with IPOs, the risks are increased as there is little or no historical data to analyze.
We recommend that you review the Economic Calendar to find the dates of upcoming public offerings and follow the financial news to get as much information about the company as you can.
Once the IPO has happened you trade on the company’s shares like you would on any other company. With Markets.com you can trade CFDs on over 2,000 instruments including hundreds of publicly listed companies.
January 08th, 2017
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