Snap, maker of teen social app Snapchat, files for IPO
NEW YORK: The company behind Snapchat, a teen-oriented social network famous for its quickly disappearing messages, has filed for what could be one of the largest tech IPOs in years. Snap Inc said Thursday that it’s seeking up to $3 billion in an initial public offering, a figure that could shift based on investor demand. That demand will help determine the price per share sought by Snap in the upcoming weeks. Snapchat has millions of users, and Snap has built a thriving ad business on it. But the company has also made a lot of money - nearly $900 million - disappear in the past two years.
Snap, crackle, pop
The fast-growing social network for the younger set boasts 158 million daily users. It lets people send photos, videos and messages that disappear a few seconds after viewing. It was created in 2012 by Evan Spiegel, who dropped out of Stanford University just three classes shy of graduation to focus on the app. Spiegel, 26, is poised to become a multibillionaire, along with his former fraternity brother at Stanford, Robert Murphy, 28, who is also a company cofounder.
Each man owns 227 million shares of Snap stock, which was valued at $30.72 per share nine months ago when the company raised $700 million from a group of investors, according to its IPO documents filed Thursday. If Snap can fetch the same price in its IPO, Spiegel and Murphy each will be worth $7 billion.
Snapchat could have died a quick death as a “sexting app,” but Spiegel showed a knack for adapting to users’ whims and demands, just as Facebook has over the years. This, as both companies have discovered, is key to outlasting social media fads. Snapchat is no longer just about disappearing messages. Over the years, it has added a “Discover” section where a diverse group of publishers - including People, the Wall Street Journal, CNN, Vice and Food Network - post video-heavy stories aimed at millennials.
Another feature, ‘Stories,’ lets people create a narrative from messages, videos and photos from the past 24 hours. It is so popular that Facebook’s Instagram now has a version of it, too.
And then there’s goofy “Lenses,” which lets people add animated overlays to photos and videos - animals, for example, or flower crowns and sparkly eyes. The company came under fire a couple of times for adding filters many saw as racist. One had slanted eyes and buck teeth commonly associated with negative Asian caricatures; another, which Snap called a “Bob Marley” filter, darkened people’s skin. Snap later got rid of the offending filters. — AP