If you've been on Wall Street recently, perhaps you've noticed the cryptic and ever-changing Snapchat ads in a window around the corner from the New York Stock Exchange and wondered "What gives?"
Perhaps this is what gives: Snap Inc. is preparing for an initial public offering as early as late March, The Wall Street Journal reported Thursday. The potential valuation: $25 billion. Those following Snapchat's history may remember that Facebook offered a $3 billion buyout in 2013, which CEO Evan Spiegel turned down.
There are questions around the justification behind the sum—the last valuation, in May, was nearly $18 billion and projected revenue for 2016 was $250 million to $350 million—but there is no question that Snapchat has been an absolute phenomenon of a social media platform, with the majority of millennials saying it's their primary source for messaging friends and viewing video. But with the rise of copycat Instagram Stories and Facebook testing out a similar feature of its own, perhaps the moment is right for Snap Inc. to cash out before it risks being muscled out of the game it created.
But that's a pessimistic way of looking at Snapchat's prospects. Here's a positive way:
- Many use the app instead of their smartphone's native camera app, ingraining use of the platform into daily behavior.
- The new Spectacles stand to become a cool, must-have accessory, especially if adopted by hot influencers.
- Ad sales are big revenue generators.
- Filter sales are big revenue generators.
- No other platform has found a way to take advantage of QR code technology the way Snapcodes have, making Snapchat unique when it comes to ease of adding friends.
So investors and communicators have the same question: Will Snapchat be the next Google, or the next Twitter? Fortunately for the PR crowd, their savings aren't on the line, and the worst case is that investing time in learning to communicate via Snapchat will be readily translatable to whatever medium emerges victorious.
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