Slashdot Mirror
Snapchat Files For IPO (reuters.com)
According to sources familiar with the matter, Snapchat has filed for an initial public offering (IPO) that could value the company at $25 billion, making it the largest IPO since Chinese e-commerce giant Alibaba Group went public two years ago. Reuters reports: Snapchat filed with the Securities and Exchange Commission under the U.S. Jumpstart Our Business Startups Act. Companies with less than $1 billion in revenue can secretly file for an IPO, allowing them to quietly test investor appetite while keeping financials confidential. A Snapchat IPO is seen by many investors as a bellwether for many of the largest so-called "unicorns," private, venture-backed companies that are valued at more than $1 billion. Nicknamed "decacorns," these companies are valued in the tens of billions of dollars and include Snapchat, car-sharing company Uber Technologies Inc and home-sharing company Airbnb. No decacorn has yet tested the public market, and it is unproven whether they can beat or even replicate such astronomic valuations with more scrutinizing public investors. Snapchat started in 2012 as a free mobile app that allows users to send photos that vanish within seconds. It has more than 100 million active users, about 60 percent of whom are aged 13 to 24, making it an attractive way for advertisers to reach millennials.
Dot Bomb 2.0 here we come!!!
Your investment may be short-lived and self-deleting.
It has more than 100 million active users, about 60 percent of whom are aged 13 to 24, making it an attractive way for advertisers to reach millennials.
And by the time the investors figure out that those people don't have much disposable income, the current owners will have all cashed out.
Oh, and just keep an eye on how much money various banks will make out of this.
Everyone is in it to make money, what part of that don't you understand? Why stay private and have a few hundred million dollars when you can go public and rake in the billions.
The beginning of the end. Make a lot of cash on the IPO, cash-out to ???
If you want news from today, you have to come back tomorrow.
Yes, it's amazing how a company that has yet to make a dime of profit is worth $25 billion dollars. I'm guessing that, like all chat apps, it will never make a profit. Chat apps are a black hole for money.
Are agnostics skeptical of unicorns too?
That just means you're probably older than 25. You probably still use e-mail too.
I think most adults don't use it, but know all the young people use it, so all the money men figure it's the Next Big Thing(tm), and are overvaluing it because they don't want to miss out on the Next Big Thing(tm), even though no one has a damn clue how anyone is going to actually make money from it, let alone $25B of revenue from it. But they know it's going to be BIG.
Same as Twitter, I think, although I have a feeling as soon as everyone figures out that no one actually wants to *buy* it as its current price, we're going to see a little air let out of that balloon.
Irony: Agile development has too much intertia to be abandoned now.
It's definitely nearing the top of the bubble again. I'm not totally surprised Snapchat is trying to desperately IPO and get their founders cashed out before everything pops. Maybe they've learned something from history -- the late 90s was full of companies whose sole strategy was to rush a website or e-commerce offering out, then IPO or convince an established company to buy them out. Or, maybe they saw Twitter couldn't sell itself to anyone and want to hurry up and get their money out.
Everything "consumer social" is pretty saturated these days by Facebook and Twitter, so maybe it's a strategy to convince Facebook to buy them rather than actually going through with the IPO. The next big mini-bubble is "workplace social" -- Slack and Atlassian are all over that one and there are going to be billions wasted before people figure out that very few non-hipsters (in any age bracket) want a mash-up of Facebook and SharePoint as their primary work tool.
I think the big difference about this bubble is that it's going to last a longer time and sort of deflate slowly rather than pop. Ironically, that's because of cloud computing. These bubble companies are running on Amazon or Google or Microsoft cloud infrastructure and they don't have fixed costs like the late 90s dotbombs did. They don't have to buy a data center and servers -- the VC money is being used to rent them from providers. Companies can live a lot longer when there's no fear of a hard stop when you simply run out of money. It's too bad, because there was a ton of infrastructure items on the eBay market from bankruptcy sales last time around...not this time!