Snap Inc, owner of popular messaging app Snapchat, will price its initial public offering after the U.S. stock market closes on Wednesday in the most eagerly awaited technology IPO since Chinese e-commerce giant Alibaba went public in 2014. The pricing will be the first test of investor appetite for a social-media app beloved by teenagers and 20-somethings but which has yet to turn a profit. The company's losses widened last year, and it is experiencing decelerating user growth in the face of intense competition from larger rivals such as Facebook. Despite the challenges in converting "cool" into cash, Snap is targeting a valuation of between $19.5 billion and $22.3 billion from listing on the New York Stock Exchange on Thursday, the richest valuation in a U.S. tech IPO since Facebook in 2012. Snap is looking to price 200 million shares on Wednesday night at a range of $14 to $16 dollars a share. The sale, which aims to raise around $3 billion, has the advantage of favorable timing. The market for technology IPOs hit the brakes in 2016, the slowest year for such launches since 2008, and investors are keen for fresh opportunities. A successful launch could encourage debuts by other unicorns, the moniker given to tech start-ups with private valuations of $1 billion or more.
Early indications for selling shareholders and the company have been positive. The IPO book is said to be over-subscribed with orders coming in at the high end of the range or higher. At least one new investor indicated it was willing to buy a large chunk of the IPO and not sell it for a year, a rare commitment to make. [L2N1GD0TL]The company cut its price range last month from an original target of between $19.5 billion and $22.3 billion after investor concern over its unproven business model. It had been valued at up to $20 billion in nine separate private funding rounds over the past five years. HAVE FAITH IN SPIEGEL
Although Los Angeles-based Snap is going public at a much earlier stage in its development than social media giants Twitter Inc or Facebook Inc, the five-year-old company is valuing itself at roughly 49 times revenues at the top of its suggested range, nearly double the 27 times revenue Facebook fetched when it went public in 2012. To justify its suggested valuation and fend off concerns about slowing user growth, Snap has highlighted how much time its users spend on the app and the revenue potential of the emerging trend for young people to communicate with video rather than text. The company has been vague on its specific plans to lead and monetize image-driven conversations, but it has suggested investors have faith in the vision of its co-founder Evan Spiegel, whom it introduced in its investor roadshow as a "once in a generation founder." [L8N1G67DA]
Uber CEO says he must 'grow up' after argument with driver ((Editor's note: Please note language in 6th paragraph that may be offensive to some readers.))
Apple says it spent $50 billion last year with U.S. suppliers CUPERTINO, Calif. Apple spent roughly $50 billion last year at U.S.-based suppliers including 3M and Corning , Chief Executive Tim Cook said on Tuesday, stressing the iPhone-maker's commitment to U.S. manufacturing.
Snapchat owner Snap Inc said to have worked on drone product: NY Times Snapchat's owner Snap Inc has worked on a drone that could help users take overhead videos and photographs and then feed that visual data to the company, the New York Times reported on Tuesday.