How Does the Snapchat IPO Stack up to Facebook and Twitter?

Evan Asano  |



Evaluating a company’s IPO based on its reported revenues, net income or loss, user base, and expected valuation can be a challenge. Snapchat’s IPO is full of numbers, but without context, it can be difficult to grasp what they really mean for Snapchat’s immediate and distant future. So we put those numbers up against some others — those belonging to the respective IPO filings of Twitter (TWTR) and Facebook (FB) — to get some context, and then took a good hard look at what came next for each to see if past events might shed some light on where Snapchat might be headed as it prepares to go public.

Twitter and Facebook’s IPOs were wildly different, though both were successful (at least on paper). Twitter filed its IPO in 2013 with an expected valuation of just over $14 billion and a target share range of $23-25. Shares opened at $26, then jumped, leaving Twitter with a valuation of $24 billion — $10 billion higher than anticipated. In the year prior to its IPO, Twitter boasted 100 million daily active users and $371 million in revenue.

Those sound like impressive numbers, until you put them next to those from Facebook’s IPO, which reported 483 million daily active users, $3.7 billion in revenue, and a net income of $1 billion in the year prior to filing, and an expected valuation of $104 billion. While Facebook didn’t eclipse its expected valuation by a factor of billions like Twitter did, what happened next is even more interesting.

In the time since their respective IPOs, Facebook has managed to continue growing at a staggering rate. With 1.2 billion daily active users and a net income of over $10 billion in 2016, Facebook is still growing. Twitter, on the other hand, doesn’t show the same promise. In 2016, three years after its IPO, its daily active user count hasn’t made the same kind of incredible gains, and Twitter reported a net loss of -$457 million.

Of course, Snapchat is neither Facebook nor Twitter. There’s no amount of comparison between it and other tech IPOs that can accurately predict what’s going to happen once Snap goes public or in the time after. But by comparing Snapchat to Facebook and Twitter, we can begin to glean some context for the big numbers that tend to take center stage in the many discussions surrounding tech IPOs.

See the original article at Mediakix here.

Evan Asano is the CEO and founder of Mediakix, a leading influencer marketing company that works with top brands and social media influencers. Evan has been published in Forbes, Inc., and Fortune. In his spare time, Evan enjoys surfing, photography, scuba diving, and traveling.

Since 2011, Mediakix has worked with the largest and fastest-growing brands on influencer marketing campaigns across YouTube, Facebook, Instagram, Snapchat, and top lifestyle blogs. Mediakix draws upon its social media influencer network of thousands and years of campaign performance data to develop customized, ROI-driven campaigns that meet and exceed its clients’ marketing and business objectives. From initial strategy to campaign execution and analysis, Mediakix offers the best comprehensive and managed services for its clients. These brands, which span across all major industries, include Nordstrom, Blue Apron, LG, Birchbox, Fairmont Hotels, UberEATS, Sleep Number, David Yurman, Participant Media, and many more.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
FB Facebook Inc. 137.42 -2.21 -1.58 21,195,460 Trade
TWTR Twitter Inc. 32.83 -0.13 -0.39 29,497,106 Trade

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