26-year-old Founder and CEO might have dropped out of Stanford and turned down $3 billion form Facebook, but this week he put his suit on and took the company to Wall St. 

 Spiegel has kept a tight grip on his company ownership, holding 21.8% of Snap’s class A shares, 2% of its class B shares, and 50% of its class C shares. Equally to his Co-Founder Bobby Murphy giving them each approximately a net worth of $4 billion, according to Forbes. 

Announcing their IPO is setting in motion what could be the biggest tech flotation in years by revealing it generates over $400 million in annual sales and has 158 million people using its app on a daily basis.

 

So should you buy stock in Snap? Here are some things to consider:

  •  Snapchat is projected to have around $1bn of revenue in 2017, three times its total sales in 2016

  • In 2016 It had annual revenue of $404.4 million, up from $58.6 million in 2015.

  • The company filed for a $3 billion IPO, which is soon to change when the company sets a price on the deal

  • The IPO filing shows Morgan Stanley, Goldman Sachs, JPMorgan, Deutsche Bank, Barclays, Credit Suisse, and Allen & Company are among the banks working on the share sale.

  • Snap is the only currently known threat to Facebook and Google, by going public they are showing that they intend to remain independent.  But they can still buy them,

  • Rather than relentless user growth, Snap inc is expected to point to high user engagement with Snapchat.

  • This will require a shift in thinking for Stockmarket investors, who have been trained to demand fast-growing audiences.

On the flip side

  • Usage of Snapchat stories has declined significantly since Instagram stories began.

  • Snapchat lost $372.9 million in 2015 and $514.6 million this past year, more than its total revenue

  • Snapchat is nowhere near earning the sort of ad revenues that Google and Facebook bring in. Those two scoop 58% of digital advertising in America and last year claimed nearly all of the market’s growth

  • Snap says it doesn’t have any intention of paying cash dividends, possibly ever.

  • They have reportedly been seeking a $25 billion valuation

  • The 2 CEO’s seem to be keeping total control

  • No one but them, not even the board and other top executives, knows all the important details of the firm’s strategy and future plans.

But in the highly concentrated internet ecosystem, companies increasingly must eat or risk being eaten. The coming years will show whether Snap is predator or prey.