Snapchat warns on profits
The parent company of Snapchat, Snap Inc, published its IPO filing on Thursday night, revealing for the first time how much money the messaging app makes.
Snapchat is beloved of teens and young adults – as well as a fair few of their parents – but as soon as its accounts became public its ability to live up to a valuation of up to $25 billion (£20bn) was called into question.
Snap lost $515m last year, while its filing revealed that user growth was already slowing.
At the end of 2016, Snapchat had 161 million daily users, some 60 million of which are based in the United States and 10 million in the UK.
This compares with 400 million people who use Instagram a day, and 1.2 billion who use Facebook every day. although it is more than Twitter, believed to have around 140 million.
Snap is raising $3 billion and according to reports, gunning for a valuation of between $20 billion and $25 billion. That would make it worth more than Tesco or Sky. Not bad considering it lost $515m last year.
What investors will be hoping is that the company will shake off its early losses as it grows and the mobile advertising market becomes more valuable. READ MORE: http://www.telegraph.co.uk/technology/2017/02/03/snap-ipo-can-snapchat-lose-515-million-worth-25-billion/