Oh, Snap!

Oh, Snap!

What’s the value of an app with content that disappears? The initial estimated $25 billion of Snap, Inc. has some Wall Street investors saying “no way” to the initial pitch for the public offering of the app. While scrutiny of tech-related deals is not abnormal, this projected valuation places it above both Twitter and Facebook, who are competitors in the market of social media. After re-evaluation, the new projected places shares between $14 and $16, which values the company between $19 and $22 billion. This revised number places it in a 24% decrease from the original projected number. While under scrutiny for projections, Snap, Inc. also faces the dilemma of 2016 being the lowest in financial growth for tech-related sales and deals since 2009. Snap, Inc. appears to be unphased by the obstacles they have encountered in a similar way to the handling of Facebook in 2012.

Snapchat is a social media app that allows users to send disappearing text and picture messages to one another through the application platform to their peers, as well as to location-based events. Recent developments in the app include news-based content as well as commercials at the end of user’s “stories,” a channel that publishes messages that are accessible by a user’s friend network.

Update: Snapchat’s shares did skyrocket the day it went public. However, it remains to be seen in upcoming months (and years) to identify if Snap, Inc. is sustainable.


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