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Will Snap IPO Go Boom or Bust? Looks to Raise $3 Billion
The disappearing picture and fun filter company plans to cash in with a valuation of up to $25 billion, but does the still unprofitable Snap have staying power?

The days of big tech IPOs are coming back: Yesterday Snapchat parent company Snap filed for an initial public offering on the New York Stock Exchange. It hopes to raise $3 billion with an expected valuation of $20 billion to $25 billion.

While the buzz is strong around this one, the numbers are anything but a sure bet. Snap claims 158 million active users, showing 48 percent growth from the year before. For comparison, YouTube has 180.1 million users in the U.S. According to eMarketer, Instagram will have 77.0 million in 2017 and Twitter will have 53.3 million.

Snap also has strong engagement time: Active users 25 and older open the app 12 times a day and average 20 minutes on it. Users under 25 visit 20 times a day and average 30 minutes.

Despite its large and enthusiastic user base, Snap still hasn't turned a profit. In 2015 it lost $372.9 million, and in 2016 it lost $514.6 million. Ad revenues haven't outpaced expenses, and advertising is 97 percent of the company's revenue. The decision for investors is whether or not Snap can turn things around before the next big social platform crops up.

"Snap is inventing the future of media, which incorporates everything from messaging to self-broadcasting to Spectacles," says Michael Moe, CEO of GSV Capital, a Snapchat investor quoted in USA Today. "Old media is about sitting on your couch and watching a stationary box. Snap is media in motion. It's built for digital natives that are mobile only and expect on-demand everything."

Not everyone is so bullish. One Bloomberg columnist said the IPO was "'unicorn' hype," and called the company "wildly unprofitable."

Snap will list on the NYSE under the symbol "SNAP."

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