It turns out Snapchat’s IPO valuation is lower than we expected
The company behind Snapchat has set a valuation for itself ahead of its IPO – although the figure is towards the lower end of expectations.
In documents filed with the US Securities and Exchange Commission today, Snap, Inc said it plans to sell 200m class A shares at between $14 and $16, which it expects to generate between $2.1bn and $2.3bn.
That values the company at between $19.5bn (£15.6bn) and $22.2bn, according to a report by the Wall Street Journal. That's at the lower end of the $20bn to $25bn range it originally mooted.
Business Insider reported the company may price its IPO as early as 1 March, with trading expected to begin on 2 March.
The company finally made public its intention to float on the New York Stock Exchange earlier this month, with sources suggesting it could happen as soon as March.
Snap, Inc made sales of $404.5m in 2016, up from $58.7m in 2015 – although it also posted a net loss of $514.6m, a widening of the $372.9m loss it made the previous year.
In January the company unveiled plans to set up its international headquarters in London, a big win for the UK post-Brexit, with digital minister Matt Hancock telling Morning Wire it was a "vote of confidence our economy and in British creativity".
However, in Snap's filing with the SEC, it listed an extensive range of threats to its business model, including the failure to retain users, failure to attract new advertisers – and its founders, who will retain a "substantial majority" of voting rights.
"If [Evan] Spiegel’s or [Robert] Murphy’s employment with us is terminated, they will continue to have the ability to exercise the same significant voting power and potentially control the outcome of all matters submitted to our stockholders for approval," it said.
Read more: The worrying tale of how my firm made $515m more than Snapchat last year