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Snap IPO: Why Everyone Is Eagerly Waiting For Snap To Go Public [Analysis]

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Snap, Inc. could go public as early as March if plans to file for an initial public offering pushes through late next week, sources say. The company is reportedly valued between $20 billion and $25 billion.

Snap Filed For IPO Privately In 2016

This isn't the first time Snap has generated buzz over prospects of going public. Interest in Snapchat's parent company grew when, in the fourth quarter of 2016, it filed for IPO with the Securities and Exchange Commission — albeit confidentially.

The move has since stoked appetite for Snap's flotation, given the popularity of its (once) eponymous messaging app Snapchat and its wearable Spectacles, a quirky pair of sunglasses, which marked Snap's first venture into hardware, and which consumers eagerly snapped up in September last year.

What Makes Snap IPO Different? (Some Lessons From Twitter)

When it comes right down to doing business in the trading room, how well can investor interest in Snap (driven by the success of its consumer products) be sustained, considering how quickly Silicon Valley fads fizzle out?

Take a look at Twitter for instance, which today is in debt, still struggles to make money, struggles to find a buyer, and continues to face a slew of departures of its top executives.

Twitter was once the celebrated platform that broke new ground in social news sharing. It still serves as an aggregator of updates across the social sphere and a barometer of sentiments of vocal netizens. But, for investors, it isn't exactly positioned as a "successful long-term buy and hold," or at least not anymore.

Why Everyone Is Waiting For Snap To Go Public

So what does one make of all the hype now surrounding five-year-old startup Snap? The answer is in the company's ability to reinvent itself. And to keep at it.

For Re/code's Kara Swisher, who broke the news that Snap will release IPO details next week, the company's "innovative series of new offerings has solidified it as the most fast-forward social media company around." Even social media behemoth Facebook can't help but take a page from Snap's playbook and copy a few of Snap's most original features, such as filters and short video posts.

Snap Co-Founders Evan Spiegel, Bobby Murphy To Retain Control

After the IPO filing begins a possible nine-week road show. Snap will have to convince potential shareholders of its worth as a publicly traded company.

But while Snap works on its pitch, it's important for would-be Snap investors to know that the stock structure the company is working out will heavily favor Snap co-founders Evan Spiegel and Bobby Murphy. 

Both Spiegel and Murphy, who will own 45 percent of the stock, will retain more than 70 percent of the voting powers within the company. 

The issuance of dual-class stock is a classic IPO move to retain control and not at all new, especially for tech companies that consider innovation and the decisions being handed down from the top, as opposed to being set by majority of the public, as the primary drive toward profitability.

Investors looking to buy into Snap can only hope that interest in the products and profitability won't be as ephemeral as the messages on Snapchat.

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