What are your snaps worth? Snapchat, the social media messaging system that allows users to send expiring photos to their friends, thinks they’re worth quite a bit. The company is getting ready to go public. Snap Inc., the parent company of the Snapchat app, has filed paperwork for an initial public offering, or IPO, of around US$25 billion, a value that would make it one of the “highest-profile stock debuts in recent years,” according to the Wall Street Journal.
At a time when other social media platform are struggling for profitability, some wonder if this valuation is a little too high. Recently Twitter shut down the app for its subsidiary Vine after only three years online. Snapchat is only four years old but are doing much better than their competitor. With over 150 million users, the app appears to be right on track. Earlier this year, Snap Inc. told investors that it expected between $250 million and $350 million of revenue in 2016 and as much as $1 billion next year.
The Wall street Journal reports that most of Snapchat’s profits come from selling ad space between Snap Stories posted by various media partners. The app also allows companies to purchase event- and location-based geofilters. Users in St. Catharines can find filters advertising the “garden city” or one featuring the Port Dalhousie lighthouse in order to mark their snaps. Brock students will also find several filters featuring the school, including one prominently featuring the Schmon tower. Advertisers though, might have difficulty getting their ads approved as the company grows into its vast market share.
Snapchat rival Facebook went public in 2012, and was valued at over $100 billion and share prices opened at $38 per share, though the value dropped off sharply shortly after the IPO. Snap Inc., who renamed themselves this year, have shown their interest in expanding beyond their initial chat app including a set of glasses that allow users to take short videos from their own perspective and post them online. The IPO is expected in March of 2017.