Richard Nieva is a senior reporter for CNET News, focusing on Google and Yahoo. He previously worked for PandoDaily and Fortune Magazine, and his writing has appeared in the New York Times, on CNNMoney and on .
She previously covered mobile as a senior reporter at CNET and wrote for Dow Jones Newswires and the Wall Street Journal. Shara is a native Midwesterner who still prefers “pop” over “soda.”
Snap, the parent company of Snapchat, has released its IPO filing, and included that tidbit about how it was first dismissed as an app for sending nudes. There’s plenty of other juicy information Snapchat shared about its business as the 5-year-old company prepares to go public. The popular mobile app, known for its self-detonating photos and videos, said it aims to raise about $3 billion.
The Los Angeles company has already built up its fair share of lore, as it emerges as one of the tech industry’s newest power players. Spiegel has already stared down Facebook’s Mark Zuckerberg, reportedly balking at his $3 billion takeover offer in 2013. The company was the target of a lawsuit by an ousted co-founder.
Here’s another one of Snapchat’s trademarks: it’s confusing. It’s got a funky design, probably on purpose, like a user interface secret handshake. (In fact, that’s listed as a risk factor.)
But the app itself may not be the only thing confusing to you. Maybe you’re not sure what all the fuss is about. We scoured the 178-page IPO filing and picked out some tidbits to bring you up to speed:
Who is Snap? This is how they describe themselves: “Snap Inc. is a camera company. We believe that reinventing the camera represents our greatest opportunity to improve the way that people live and communicate. In the way that the flashing cursor became the starting point for most products on desktop computers, we believe that the camera screen will be the starting point for most products on smartphones. This is because images created by seras contain more context and richer information than other forms of input like text entered on a keyboard.”
The money. When it first filed with the SEC on Feb. 2, Snap put its valuation at $20 billion to $25 billion. In a revised filing on Feb. 16, it shifted a little lower, valuing itself in the range of $19.5 billion to $22.2 billion, with an expected IPO price of $14 to $16 per share. It’s looking to raise $3 billion in the offering.
The man. Evan Spiegel, Snap’s cofounder, owns about 22 percent of the company. When it goes public, he’ll get another 3 percent of the stock. His annual salary starting in October was $500,000, but it will now go down to $1. He’ll get a $1 million bonus each year (based on parameters he and the board agree on), and Spiegel’s stock holdings make him a billionaire many times over.
Evan Spiegel, a 26-year-old Stanford University dropout, co-founded the app in 2011
“Delete by Default.” That appears to be the company’s new mantra. Snap explains that once se popular, photos themselves became less important to save. “When images became so easy to take and share with se easier to use images for communication,” Snap said.
Shara Tibken is managing editor for CNET News, overseeing a team covering tech policy, EU tech, mobile and the digital divide
Not profitable — ever? Snap has never turned a profit since beginning commercial operations in 2011. As of December 31, it had an accumulated deficit of $1.2 billion. The company warns it expects future operating losses, and “may never achieve or maintain profitability.” To sum up: it’s never made any money and maybe never will.