Snapchat’s IPO filing has been accompanied by plenty of chatter surrounding Snap’s profitability, potential stock prices, growth, and plans for the future. And with that comes the inevitable comparisons to the notable IPOs of Facebook and Twitter. Snapchat is, in some ways, a very different company with a very different IPO, but certain similarities are tough to ignore and may, with a little context, shed some light on what’s to come for Snapchat.
IPOs typically have us talking in big numbers that quickly become meaningless without context. Without some yardstick by which to measure success, valuations become little more than stacks of monopoly money to the average onlooker. But in looking at what happened after Facebook and Twitter’s IPOs and where they are now in terms of revenue, valuation, user base, and growth, it becomes easier to understand what it means to have a “successful IPO.”
Twitter’s IPO was, by all accounts, a smashing success. Its shares opened at the target price, then quickly skyrocketed, leaving it with a valuation that was $10 billion higher than expected. Facebook’s IPO was also a success, opening at the target price and meeting its expected valuation. But from there, things get really interesting.
Corsair Capital was down by about 3.5% net for the third quarter, bringing its year-to-date return to 13.3% net. Corsair Select lost 9.1% net, bringing its year-to-date performance to 15.3% net. The HFRI – EHI was down 0.5% for the third quarter but is up 11.5% year to date, while the S&P 500 returned 0.6% Read More
Facebook has since seen huge growth in revenue and user base, ending 2016 with 1.2 billion daily active users and over $10 billion in net income. Twitter, by way of contrast, ended 2016 with a net loss of -$79 million and 140 million users. In the years since its IPO, Twitter has struggled to sustain growth and effectively monetize its smaller-but-undeniably-mighty platform. Facebook, meanwhile, has found ways to grow consistently and to bring in a staggering amount of money.
It’s too early to say what, exactly, is in store for Snapchat. There’s no crystal ball that might tell us whether or not shares will open at the target price of $14-16 or if that’s going to mean anything in the days after Snap goes public. But looking at the key metrics and trends from Facebook and Twitter might help us make a few predictions as to where Snap is headed.
Infographic source: MediaKix