SnapChat, the popular messaging and social media platform has been under a lot of scrutiny lately and that’s primarily because of its upcoming Initial Public Offering.
In early February 2017 the company registered to list on the New York Stock Exchange. On the 2nd of March 2017 it plans to sell up to 230 million non voting shares which will raise an estimated US$3.6 billion based on the initial share price of $15.
This gives Snapchat a value of over US$22 billion and creates a lot value for the company and its founder, Evan Spiegel. It’s also one of the highlights in corporate tech right now.
Tech investors not only in the USA but around the world are following the Snapchat IPO closely. Even Zimbabwean entrepreneur and Pan African investor Strive Masiyiwa has also expressed his interest in the Snapchat IPO.
Commenting on one of his recent blog posts, Masiyiwa highlighted the massive value being created by the IPO, particularly against the backdrop of its financial performance. He also expressed his interest in buying shares in Snapchat.
The big business story that caught my attention last week was the planned IPO of a company called Snapchat. The founder is only 26 years old. The company is expected to list at a valuation of about $26bn, making it almost twice the value of MTN. Snapchat has a turnover of less than $1bn, and makes huge losses (it has never made any money). Do you understand why? I do, and I will be looking to buy some shares myself!
As the founder of Econet Wireless – a multinational entity with its hands in mobile services, energy, telecoms and finance – Masiyiwa’s interest in tech investments like Snapchat shouldn’t be surprising.
It also highlights an interest in growth businesses with intrinsic value, something that startups and loss-making high-value businesses like Snapchat represent.
image credit – YouTube
8 comments
Those shares are also have no voting rights unless maybe he is purchasing for speculative purposes it does not make sense!
typical zimbabwean . u buy no shares but rushing to say its a bad idea.
FYI I actually own shares in several companies and if you went through the Snap IPO prospectus you would have a better idea of what I am talking about!
It’s definately speculation because the company has not demonstrated that it can be profitable. However such investments have demonstrated they can be profitable from previous IPOs of loss making tech new comers with large userbases.
Snapchat doesn’t have a large userbase, outside the US and they are being cloned on every corner by facebook a global social media giant with a very aggresive CEO, who resmbles Bill Gates style of kill everything to grow. For me Snapchat jus is another twitter, though they do not define themselves as a tech company but rather a camera company. Eventually they maybe worth the money but buying their shares is pure gumbling
Is this a good idea – the amount of pressure the Facebook beast is putting on Snapchat kill it off shortly
I get what you are saying. Snapchat has to buy other companies to diversify their portfolio like Facebook.
Its not necessarily purchasing other companies per say, its innovating faster especially given that their target market is young and prone to switch trends quickly.