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You think there are a lot of Snap Inc. stories now? …a hoard of headlines are yet to come.
For IPO investors, the wait will continue until an official S-1/A is filed with terms.
However, it is highly positive to see the amount of stories trickling out about the messaging company as it indicates the company is interested in ‘creating noise’ about their company to the investor community.
Some headlines: Snap will reportedly look to move into a 50,000 square foot space in Seattle, they are looking to drive a ‘hard-bargain’ with banks, and they are cracking down on issues that may give shareholders head-aches.
Looking at the hard-bargain with banks issue…it is our opinion that Snap indeed does have the upper-hand with the banks. Three factors contribute to this: the high-profile nature of Snap, the extended wait for this company to hit do a public offering and the high-valuation/number of ‘angel investors’ who are in this deal. Snap will likely be able to hand-pick its underwriting bank. Which underwriter wants to be apologetic to its client-base about not providing coverage on what everyone will be talking about.
Next, Snap will reportedly crack down on fake news, misleading stories and overtly sexual stories. This is a reaction to a lawsuit filed by the mother of a 14-year old boy who sued (and settled outside of court) for the ease at which images were regularly shown without proper warnings. The fake news argument has turned political and Snap will likely err on the side of caution versus making a bold, hard stance during this chapter of their company. Snap’s main goal from a platform standpoint is to put out potential fires before they happen. Have solutions before there is a roadshow.
Snap Inc. has waited this long to go public and they are doing proper due-diligence and paying attention to the small details to ensure a successful launch.
But in reality, the real chatter to pay attention to is proper valuation.
How will the MAU (monthly active user) metric be used in comparison to social media peers Facebook and Twitter? Is a SnapChat user more valuable than a user of a different platform? How do you value a high engagement level?
And the question that Twitter just can’t answer in its 1,174 days as a public company, how do you monetize the platform?
Stay tuned.
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