Snap Inc's initial price range puts the company's initial public valuation below the $25 billion it was reported to be seeking.
This would give Snap a share price of between $14 and $16 each, but a final IPO price will be decided once it has finished consulting with its investors from today (16 February).
"The concerns are about Snap, not the IPO market".
The firm has set its value range between $19.5bn and $22bn, with share prices now expected to be available at $14 to $16 a pop on the New York Stock Exchange. Holders of class C stock - restricted to the company's founders, CEO Evan Spiegel and chief technology officer Bobby Murphy - are entitled to 10 votes.
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Snap had a net loss of $514.6 million on $404 million in revenue for the year ending December 31, 2016, compared to a net loss of $372.9 million on $58.7 million in revenue in the prior year.
Snap said it plans to use the IPO funding for "general corporate purposes, including working capital, operating expenses, and capital expenditures", according to the filing. The class C stock represents 88.5% of the voting power of the outstanding capital stock after the IPO. That would raise about $3.2 billion, and Snap estimates its proceeds from the deal would be $2.1 billion to $2.3 billion.
The company adds that while it might purchase some "complementary businesses, products, services, or technologies", it is not anticipating any material acquisitions. The filing also shows how the company has evolved over the past few years. The company is selling 145 million non-voting Class A shares, and existing shareholders will sell 55 million, meaning total proceeds of United States dollars 2.8-3.2 billion, in line with its initial SEC filing for the offering.
On a fully diluted basis, which accounts for options and convertible preferred stock conversions, Snap would have a valuation of between US$19.5 billion and US$22.2 billion, people familiar with the matter said earlier. Snap's earliest investor, Lightspeed Venture Partners, could make as much as $74 million.