Snapchat Case

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An IPO is an Initial Public Offering when a company first starts to sell shares to the public. This is the first opportunity that customers will have to purchase such shares when the trading first begins on the IPO.
When a company decides to go public and has made the decision to offer the IPO, they usually do this to raise capital for company expansion and for future investments. This is how the company is looking for new financial resources, by looking for external investors to raise more capital. This is a common thing for up and coming technology IPO’s such as SnapChat.
In the case of SnapChat, a social multimedia messaging app that is popular is North America and throughout Europe. Snapchat held its first initial public offering (IPO) on May 2017, opening shares at $17 dollars a …show more content…

While Economist had predicted that Snapchat would become a technology giant such as Facebook did. To date roughly 180 million people use the Snapchat app on an average of 18 times per day, with over 60 percent sending multiple snaps every day. But to no surprise the participants are aged 18-25 years old. Social apps in many ways could be a weird business, because it has no apparent value. When retained earnings and the debt for funding is lacking, then an IPO becomes one of the most probable ways to have continued growth for the business. This strategy is used to help maximize the value of the company. Historically an IPO has been an offer to a large number of retail and institutional investors that become shareholders of a company. With a huge magnitude of a large number of investors with their confidence with the liquidity of the investment in a public entity will assure current owners of maximum share valuation. As Snap CEO has stated, that it was the right time to go public and the right thing to do at the time. As we become a public company, we’re making a similar commitment to our new investors and we will work hard to fulfill it. (Tom Taulli,

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