Snap Inc., the maker of the disappearing photo app Snapchat, filed publicly for an initial offering, the first USA social-media company to do so since Twitter Inc. more than three years ago.
"We have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability", Snap said in the filing.
In documents filed with the Securities and Exchange Commission, Snap said it took in $404 million in revenue a year ago but lost $515 million. Snapchat's parent company Snap is reportedly working on lenses that will interact with landscapes and objects. Snap also made moves to diversify past year with the launch of Spectacles, a pair of smart glasses that record video clips.
For example, the company's mission: "Snap Inc.is a camera company".
On any given day, you can flip through collections of posts from users attending the same event or find big name publishers like Vogue, National Geographic and CNN curating content specifically for Snapchat.
Snap is perceived as the biggest competitor to Facebook (FB) and Twitter (TWTR) for social traffic, especially among younger individuals. Bloomberg reports that Snap has been touting its high user engagement (like time spent) in private pitches to analysts and bankers, and the S1 should signal how much the company plans to tout high engagement vs. user base growth going forward. In comparison, Instagram reported 300 million DAUs in June when it had 500 million monthly active users.
"Since they've managed to successfully change the way advertisers think, investors should be an easier sell", Cakmak says, before adding a caveat: "So long as the growth curve remains steep".