The owner of messaging app Snapchat, Snap Inc, is targeting a valuation as high as US$22bn ahead of its upcoming initial public offering (IPO).
In a regulatory filing today, Snap said it is expecting a price range of between US$14 and US$16 a share, valuing the company at between US$19.5bn and US$22.2bn.
That’s less than the US$25mln which had been previously mooted, but it still puts it on course to be one of the US’s largest ever tech flotations.
The US start-up is offering to sell 200mln Class A shares and will trade under the ticker ‘SNAP’. Should this allocation be snapped up, another 30mln shares will be offered for sale.
Snap is estimating that net proceeds from the IPO will be around US$2.1bn, or US$2.3bn if the underwriters’ option to purchase additional shares is exercised.
That’s assuming a price of US$15; at US$16 the total amount raised would be US$3.6bn.
“We intend to use the net proceeds we receive from this offering for general corporate purposes, including working capital, operating expenses, and capital expenditures,” the company said in its S-1 filing with the US Security and Exchange commission.
“We may also use a portion of the net proceeds to acquire complementary businesses, products, services, or technologies. However we are not contemplating any material acquisitions at this time.”
Co-founder and chief executive Evan Spiegel, along with chief technology officer Robert Murphy, will hold 88.5% of the votes after the IPO as they hold Class C shares which come with voting rights, whereas the Class A common stock does not.
Spiegel, 26, and Murphy, 28, are both set to become billionaires when the company lists.
In 2016, Snap generated US$405mln in revenues although losses widened to US$515mln.
At the end of the year, Snapchat had 158mln daily active users, up almost 50% year-on-year. However, numbers dipped in the final quarter which the company put down to performance issues as well as increased competitions from the likes of Facebook-owned Instagram.
Story by ProactiveInvestors