Following the biggest technology IPO Alibaba back in 2014, the company behind the popular messaging application Snapchat is set to finally launch its initial public offering on Wednesday’s market close.
Snap Inc, which delivered huge losses last year due to the company investing heavily in expanding its hardware business is also set to price the initial public offering of its shares on Wednesday’s close.
More than a week ago, the company lessened their valuation from initially expecting the value of their IPO to range at around $20 to $25 billion during the initial filing to lowering the official valuation to go at around $19.5 billion to $22 billion in their second filing.
Around 230 million shares are set to be offered on their IPO under the ticker SNAP on the New York Stock Exchange with an additional 30 million shares to be added possible depending on the underwriter’s decision. Snapchat currently expects earnings of $2.1 billion to $2.3 billion from the sale of their shares at a price of $14 to $16 per share.
The much awaited IPO is expected to cash in up to $3 billion as technology shares slowed during the previous year with Snapchat offering fresh opportunities for investors looking to invest in tech IPOs.
Spiegel’s Monetization Plans
Despite concerns to whether how the company intends to earn through the initial public offering of its shares at such an early stage of the company’s development, the five-year-old company’s founder Evan Spiegel stated that it is valuing itself twice than Facebook (NASDAQ:FB) did when it launched its IPO back in 2012.
The company, which has lowered their valuation earlier is still set to be the richest tech IPO in the U.S. following Facebook as Snap is currently confident about the amount of time their users currently spend on the application has helped boost revenue and raise the potential of the application more than just a disappearing messages application.
Along with the Snap's plans to focus more on hardware development which will follow the release of its Spectacles last year and to monetize the application which offers image-driven conversations.
Spiegel is set to earn as much as $3.8 billion as he is currently holding around 17% of stake in the company while co-founder Bobby Murphy will be selling around 16 million shares during the initial public offering and could earn around $256 million. A successful IPO launch will earn current Snap investors millions of dollars within a few days of the offering.
Snap Working On New Hardware
After the release of the Spectacles, the company is now reportedly working on a drone as Snap is working its way in becoming a camera company rather than an application company following the strong competition it faced on the release of Instagram’s stories and live videos.
CEO Evan Spiegel hinted about the power of camera technology as a way of communicating with others in a video for their investors released last month. It is currently unclear to whether when the company’s next products would be released.