Plans have leaked revealing Snapchat’s plans to go public within the next few months. The news comes off the back of a report revealing that Instagram’s new ‘Stories’ feature has seen around 60 per cent of Snapchat’s previous user base migrate to the Facebook owned app. Despite only launching five months ago, Instagram’s Stories have attained around 100 million daily users, in comparison to Snapchat’s 150 million. The current IPO is estimated at around $25 billion. This figure is a huge jump from the previous valuation of the company at $17.8 billion made in May, following another round of private investment. If the IPO were to go ahead, it will make Snapchat one of the largest tech companies to make its debut since Facebook’s decision to go public in 2012. Should the current evaluation go ahead, it appears to justify CEO Evan Spiegel’s decision to refuse a $3 billion takeover by Facebook in 2013.
L&F Capital Management have suggested that Snapchat’s current advantage over its competitors are easily replicated. The demographic of 12-25 year olds currently dominates Snapchat’s user base, however given the overwhelming success of Instagram, this is likely to drop off. L&F Capital Management have suggested that Snapchat’s public IPO is likely to be a ‘one trick pony’ in the same vein as GoPro and FitBit. They predict that there will be huge initial prices in the first few days of trading, followed by a substantial drop and levelling off as investors realise the company has limited ‘protectable’ value.