Snapchat a mobile app used for image messaging, short video recording and picture taking was created by Evan Spiegel and Bobby Murphy. These Stanford University graduates first had the idea and created the app while in University. An idea coined out of a college project is now worth millions of Dollars.
This 4 year old business is ready to hit the streets, with an IPO (Initial public offering) expected to lunch early 2017, investors can get ready to jump in and have a piece of the cake, or a dry bone, oops!!. Reuters.com has it that the chosen underwriters for the IPO are Morgan Stanley and Goldman Sachs. The question is …If everything turns out as speculated, do you think it’s a good investment?
The primary source of income comes from advertisements. Snapchat introduced “Discover “which allows media publishers have a daily content on the app, there are about 11 publishers including CNN, ESPN, Cosmopolitan and etc. These companies get charged a lot to feature on the app and therefore generate income for Snapchat.
The company Snap.inc definitely has the potential to be a good investment. Why? The answer – Facebook offered to buy Snapchat for $3 billion in 2014 but Spiegel and his team declined the offer. Snapchat has about 100 million active users attracting 60% aged 13 to 24. This makes it attractive to companies who want to showcase their products or services. The company is also likely to go into the camera business the “Spectacles” (a sunglass that records short videos). Furthermore, in 2015 the total revenue worldwide was $59.2m, in 2016 went up to $366.7m and its expected to go up to $935.5m in 2017.
This is all great news for small investors, but until the IPO is out you just have to sit and wait but don’t sleep off when the cake arrives.
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