Snapchat parent company expected to publicly file for IPO this week

Dive Brief:

Recode reports that Snap Inc., parent company of social media app Snapchat, is expected to file publicly for its planned initial public offering of stock later this week.
Snap first filed confidentially for the IPO last November. If this week’s public filing happens as expected the company remains on track for a March IPO.
The IPO is led by Morgan Stanley and Goldman Sachs and is the first highly anticipated tech offering this year. It’s expected that Snap will be valued at $25 billion after the IPO.

Dive Insight:

Snapchat's IPO is likely to be the largest in years, and a filing for later this week would be the first concrete look for investors at the buzzed-about social media star's inner financial strengths and risks. If the public filing does happen, it also shows the startup is on track with the game plan laid out last fall when it first confidentially filed for an IPO, which might further boost confidence.

Both the tech and marketing worlds are waiting with baited breath to see how Snap's IPO turns out. If Snapchat can live up to its hype, the VC space might see a much-needed spark after a decidedly cool period. Recent PitchBook Data research found that, although the U.S. venture capital industry raised the most money in 2016 since it did in 2001, actual investments were down.

Just as many analysts are excited about Snap's IPO, others are equally wary of the fledgling startup. Snapchat's retention of value hinges on its ability to support marketers on its platform, and the company has introduced a variety of ad products and targeting tools over the past 12 months to better accommodate brands. However, ROI remains elusive for many, and other metrics like viewability for video ads are reportedly low.

Trip Chowdhry, the managing director of equity research at Global Equities Research, recently called Snap "total junk" and "hyper-inflated" in value, as reported by CNBC. Snapchat is also coveted for its young-skewing user base, but some question whether the app will be able to retain that audience as it matures past early adopters.