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Snapchat reveals plans for US stock market listing | |
(about 2 hours later) | |
Snap, the owner of messaging app Snapchat, has publicly filed plans to sell its shares on the US stock market. | |
The California-based firm is seeking to raise $3bn (£2.4bn) from the share sale, according to reports. | The California-based firm is seeking to raise $3bn (£2.4bn) from the share sale, according to reports. |
Based on previous investments, the tech firm would be worth between $20bn and $25bn, making it the biggest company to list shares in the US in recent years. | |
The company was first reported in November to have filed a confidential application for the listing. | The company was first reported in November to have filed a confidential application for the listing. |
Snapchat: Is it really worth $25bn? | |
The company began in 2011 as a mobile app that allowed users to send photos that vanish within seconds. | |
It now has nearly 160 million daily users, the listing plans reveal. | |
The fast-growing firm also said its revenue jumped nearly 600% last year to $404m, largely due to increased income from adverts. | |
Snapchat is seen as an appealing way for advertisers to reach young people, with over half of its users aged between 13 and 24. | |
However, heavy costs, including from marketing and research, dragged Snap to a net loss of $515m in 2016, after a loss of $373m the year before. | |
The firm is yet to make a profit and admits in the filing that it "expect[s] to incur operating losses in the future, and may never achieve or maintain profitability". | |
Facebook competition | |
Still, Snap's stock market listing is set to be the biggest in the US since the launch of Chinese e-commerce giant Alibaba in 2014, and before that Facebook's $81bn valuation in 2012. | |
It would also mean a big payout for Snap's co-founder, 26-year-old Evan Spiegel, who started the business while still at university and is set to remain a major shareholder. | |
Just over three years ago, he turned down an offer from Facebook's co-founder Mark Zuckerberg to buy Snapchat for $3bn. | |
Snap names Facebook as one of several companies it is competing with for users' attention, along with Twitter and Google-owned YouTube. | |
However, it is also seen as a fast-growing rival to those major Silicon Valley players. | |
Under pressure from Snapchat, Facebook has launched new filters and a slideshow feature on its photo-sharing app Instagram. | |
Keen to show it can make revenue from sources other than advertising, Snapchat rebranded itself as Snap last year, and debuted its video-camera sunglasses called Spectacles. | |
The kit can connect to smartphones and send video and photos to the app. |