Snap Inc., the parent company of popular social media app Snapchat, confidentially filed for an initial public offering that could be valued at as high as $25 billion, reports The Wall Street Journal.
According to Wall Street Journal sources, the company filed with the Securities and Exchange Commission within the past few weeks.
The IPO could come as soon as March. One of the sources said the valuation could be between $20 billion and $25 billion, which differs from a Wall Street Journal report last month that placed the valuation at $25 billion or possibly higher.
At $25 billion, Snap would enter the market as the biggest U.S. technology IPO since Alibaba Group Holding’s (ticker: BABA) 2014 market launch at a $168 billion valuation.
Though the company is best known for its Snapchat app, it changed its name to Snap in September to indicate its intentions to be more than just its signature app. The company revealed a new product, Spectacles, in conjunction with the name change. These are sunglasses that have video-recording capability.
More than 150 million users use Snapchat every day, according to Nielsen. Snapchat’s chief revenue source comes from advertising it sells that air between “stories,” where individual users and media partners post short photo and video snippets. Geofilters (i.e. catering to a specific location or due to an event) and “lenses” are another option marketers can purchase that give photos and videos unique attributes.
Bankers and investors think that a strong start for Snap’s IPO could make other technology companies go for offerings themselves. Dealogic reports that the IPO market has been struggling. Only 103 companies listed U.S. shares last year and raised $21.8 billion, compared to 165 deals and $34.6 billion the year prior.
Snapchat’s IPO would put it among the likes of other public social media giants Facebook (FB) and Twitter (TWTR). Facebook went public in May 2012, offering 421 million shares at $38 each and has since grown to a $337.8 billion market capitalization. Its stock is up about 11.6 percent on the year.
Twitter, on the other hand, offered 70 million shares at $26 a piece back in November 2013 when it went public, and its market capitalization has now dwindled to just $13.6 billion. Among Twitter‘s chief issues has been a user growth dilemma, not to mention back-and-forth acquisition speculation.
Additionally, both Facebook and Twitter have faced public scrutiny during this election cycle, with Facebook criticized for the fake news building up on its platform and Twitter for its abuse problem. Though both have taken measures to alleviate these issues, they provide a warning for Snapchat about what it means to face consumers, advertisers and investors alike on a greater scale.
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Snapchat Owner Files for IPO, Report Says originally appeared on usnews.com
