Snapchat Initial Public Offering Set For $22B

Snapchat Initial Public Offering Set For $22B

The market valuation that Snap is seeking - between US$16.2 billion and US$18.5 billion depending on the price at which shares are sold - is less than the company had been aiming for on its path to listing.

Snapchat has set its IPO valuation as high as $22.2bn, dialing down its previous ambitions of hitting $25bn but still putting the company on track to be on of the biggest tech floatations the USA has seen. Facebook's stock opened on the public markets at $42 per share, but in a disastrous twist, closed its first day back down at its initial $38 price. The two co-founders now plan to sell 16 million Class A shares-which don't have voting rights-when the company goes public, with the expectation that will sell more over time.

Snap will have about 1.16 billion shares outstanding after the offering and list on the New York Stock Exchange under the symbol SNAP.

The share prices, which were disclosed in a securities filing early Thursday, are non-binding.

Selling shareholders will sell 55 million shares and the remaining will be sold by the company.

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If it is to achieve its maximum value, Snap will need to convince its investors that it has the ability to grow in comparison to major competitors like Facebook and Instagram. With Uber and Airbnb still raising funds and bolstering their bottom lines as they mull public offerings of their own, Snap is expected to serve as a bellwether for the otherwise slow-moving tech-I.P.O. pipeline and a critical test of the public appetite for other unprofitable Silicon Valley unicorns.

Snap, which launched in 2012 with an app that sends disappearing messages, rebranded itself previous year as a camera company and started selling $130 video camera glasses.

Snap's co-founders Evan Spiegel and Bobby Murphy will hold 14.5 percent of Class A shares each, after the offering, down from 21.8 percent. Last year, Snap finished with total losses topping $500 million, higher than the $373 million lost in 2015.

The founders will maintain tight control over Snap's stock through a unique three-share class structure.

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