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Snapchat IPO target prices revealed – may get $22-billion valuation claim analysts

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New York: The Los Angeles based Snapchat is all set to begin trading as early as next month as it prepare to launch its IPO. The enthusiasm surrounding the Snapchat IPO is huge given the fact that analysts believe it will be the biggest IPO following Facebook and Alibaba.

There are reasons to believe that the mobile app is setting a starting price range of $14 to $16 per share. If this really happens, within no time, the mobile app will be valued close to $22 billion or even more.

The share prices of the company that were a sort of mystery till very recently, became known only following the securities filing earlier today. Though the price is non-binding it allows Snapchat Chief Executive Evan Spiegel to take things to the next stage. Morgan Stanley and Goldman Sachs are managing the IPO and the company will be able to talk to potential investors in the IPO.

Snapchat logo image created with Post-it notes is seen in the windows of Havas Worldwide offices at 200 Hudson street in lower Manhattan, New York during "Post-it note war"

The mobile messaging application was collectively developed by Evan Spiegel, Bobby Murphy, and Reggie Brown who were studying at Stanford University at that time. Like Google, the prototype for Snapchat was started by Brown and Spiegel as a project for one of Spiegel’s classes at Stanford, where Spiegel was a product design major. The app was launched on iOS in July 2011 from Evan Spiegel’s living room.

Reports suggest that the company bosses want to raise around $2.3 billion in cash from selling shares, which it would spend on hiring, taxes, technology, acquisitions, marketing and other efforts in the coming years. A report says, “And if the initial batch sells out, the company could offer another $246 million worth of shares and existing owners another $235 million, for a total sale of $3.7 billion for 230 million shares. Snap would have about 1.4 billion shares outstanding on a fully diluted basis”.

Most of shares of Snapchat of Snap Inc are held by Spiegel, Bobby Murphy and a few shareholders including Michael Lynton, Benchmark, Lightspeed Venture Partners, General Catalyst and SV Angel.

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