Report: Snap Inc. files confidentially for IPO

Dive Brief:

Snap Inc., the parent company of Snapchat, filed confidentially for its expected initial public offering as reported by Bloomberg.
The papers were filed before the election, and even though details are unknown because of the confidential filing the IPO is expected to happen as soon as March with a valuation of $20 billion to $25 billion. The stock offering could be delayed, if necessary, depending on how the market reacts to a Trump presidency.
Such a valuation would make it one of the largest stock market debuts since 2012, according to The Wall Street Journal. Bloomberg reports Snap will seek to raise as much as $4 billion with the IPO.

Dive Insight:

While the Snap IPO has been highly anticipated by the investment community, the decision to file confidentially means some key details about the company's finances will be kept private until just before the offering. This strategy is one that has been favored by tech firms in recent years.

One key benefit of a confidential filing is that companies can keep important information away from competitors. It's easy to see why this might appeal to Snap, as Facebook, Instagram and others have repeatedly copied key features and functionality of the quickly growing Snapchat app.

About the IPO, anonymous insiders told Bloomberg the company will be carefully tracking the Trump administration and how it impacts the market and that Snap is willing to delay the IPO if that is deemed the best course of action. Because Snap has revenue of less than $1 billion it was able to file confidentially under the Jumpstart Our Business Startups Act. Morgan Stanley and Goldman Sachs Group Inc., will lead the IPO.

In preparation for the IPO, Snap has been active. The parent company released a hardware product, Spectacles, which are sunglasses with a built-in camera to upload content to the Snapchat app. The flagship app, after gaining a reputation for being notoriously marketer- and advertiser-unfriendly, began rolling out features over the last year to appeal to the marketing industry. Those moves include adding tracking and measurement features that social media marketers have come to expect as well as a variety of ad formats.