SnapChat’s Market Success!

SnapChat’s Market SuccessSnapChat is a mobile app that allows users to send and receive pictures that are deleted after a certain period of time. Users enjoy geotags which add a location stamp to the pictures, as well as filters and special effects which add to their picture quality. They can also enjoy private messaging hosted through the app, as well as cloud storage for images, and news feeds from popular outlets. This app was so popular that the creators also released Spectacles, which are sunglasses with built in cameras that sync to the app. Other products the company released include backpacks and playing cards.

Finally, the parent company, Snap Inc., decided to become public in order to leverage their following to create a better brand. This stock has proven to be just as popular as the app, which is why it was the second-largest technology IPO in US history. What was the highest? You guessed it—Facebook! Actually, Facebook and Alphabet Inc.’s Google division both previously bid on the company unsuccessfully. With a high share price of $28.25, it is easy to see the success of this stock.

This success has driven up the company’s value, which is estimated at up to $40 billion. This means the company’s co-founders Evan Spiegel and Bobby Murphy will soon be worth millions. For the company, that means the ability to pay back investors and a great deal of leverage to expand. Investors will hopefully benefit from strong returns once the company utilizes the funding to improve.

This popularity was shocking to some after the company reported a loss of $414 million in 2016. Also, there is a lack of advertising power as the demographic is smaller than other competitors such as Facebook and the product is only accessible through a mobile app. Advertisements include sponsored geofilters, sponsored lenses, and snap ads which are available in article, app install, long-form video, and web view formats. This is also one of the first IPO releases that doesn’t give purchasers any voting power. However, the lack of voting power means users don’t need to worry too much about major changes within the app.

Overall, only time will tell the success of Snap Inc’s public release. Investors are hopeful that the large amount of investment will lead to stronger advertising power and more growth. However, a slowing user growth and revenue loss pose big threats. Stay tuned to our blog for more information on this tech giant’s growth, more industry news, and company highlights!

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