The IPO of Snapchat's parent company Snap, priced at $17 a share, generated significant amounts of investor attention, not just because of the company itself, but the people surrounding it.
CEO Evan Spiegel has become one of the most well-respected tech executives in recent years, and at such a young age, the 26-year old is likely to attract significant amounts of coverage. Often compared to former Apple (AAPL) CEO Steve Jobs, Spiegel is being pitched as knowing what products will attract the valuable Millennial consumer base.
Snap debuted Thursday on the New York Stock Exchange under the ticker (SNAP) . Here's a list of ten facts you should know.
1. It's a Wall Street bonanza
Goldman Sachs (GS) , J.P. Morgan (JPM) , Deutsche Bank (DB) , Barclays (BCS) , Credit Suisse (CS) and Allen & Co. are also listed on the prospectus. With an IPO this size, these investment banks will generate valuable fees from underwriting the offering.
2. IPO investors don't get any voting power
Several large tech companies have multiple classes of stock, including Alphabet (GOOGL) (GOOG) and Facebook (FB) , all with various voting rights. Snap is taking what others have done and going a step further.
Spiegel and his CTO Bobby Murphy own 100% of the Class C shares. Combined the duo have 88.6% of the voting power at the company. Essentially, nothing can be done without Spiegel or Murphy's approval.
The IPO is for the Class A shares, which have no voting rights -- it's led to some wondering whether there will be a discount for the stock because of the lack of voting power.
3. Snappin' in the cloud
When Snap filed its S-1, it unveiled it had signed a huge cloud computing services deal with Alphabet's Google, to the tune of $2 billion over the life of the contract.
The amended S-1 shows it needs Amazon's (AMZN) services as well.
In the new filing, Snap said it has committed to spending $1 billion with Amazon Web Services over the next five years, using AWS's computing, storage and bandwidth offerings.
Snap also hinted it may look to build its own offerings in the future, potentially competing with AWS and Google Cloud down the road. "In the future, we will continue to develop our software and systems to work with multiple cloud providers and may invest in building our own infrastructure to better serve our customers," the filing reads.
4. Revenue growth is exploding -- but so are the losses
Snap's revenue growth is surging as it lets advertisers do more with its user base, showing the power of its engagement levels.
In 2015, it generated just $58.7 million in sales, but in 2016 it turned on the money-making machine, reaping $404.5 million in revenue. Revenue growth accelerated throughout the year, as Snap generated $165.7 million in revenue in the fourth-quarter, up from $128.2 million in the third quarter.
However, losses also continued to rise over the same time frame. In 2015, Snap racked up $372.9 million in losses, but in 2016, losses totaled $515 million.
5. Snap is really focused on North America
6. Engagement is key for Snapchat
One of Snapchat's biggest selling points for advertisers is the amount of time its users spend on the platform.
In the S-1, Snap said users 25 and older visit the app approximately 12 times a day, spending approximately 20 minutes on it (as of December 31, 2016). Users younger than 25 visited the app more than 20 times, on average, spending more than 30 minutes a day.
Advertisers are noticing the trend, helping Snap's business. Average revenue per user, rose to $1.05 per user in the fourth quarter of 2016 -- up from 84 cents in Q3 2016 and Q4 2015.
8. Youth may be a benefit
In addition to the 26-year old Spiegel, Snap's executive team is pretty darn young, even for a technology company.
CTO Bobby Murphy is 28, Chief Strategy Officer Imran Khan is 39, General Counsel Chris Handman is 44 and and its Chief Financial Officer Andrew Vollero is the oldest, at 50 year old.
Snap's board of directors (which include Spiegel and Murphy) is a bit more experienced, which should help squash some investor qualms, Snap's chairman is 57-year old Michael Lynton, the former CEO of Sony Pictures, while ex-Procter and Gamble CEO A.G. Lafley, 69, also serves on the board.
Snapchat specifically called out Instagram, which recently launched its Stories feature that mimics Snapchat's own Stories feature. It's unclear if that impacted Snapchat's user growth in the fourth-quarter, but it only added 5 million daily active users in the quarter, the lowest during 2016.
Facebook-owned WhatsApp also recently launched its own version of Stories, further adding to Snapchat's competition.
10. Medical devices to come?
Though the Food & Drug Administration regulates Spectacles, Snap said it may wind up building more products that need to be regulated by the FDA -- chief among them, medical devices.
This passage is from the S-1 (emphasis added by TheStreet):
The FDA and other state and foreign regulatory agencies regulate Spectacles. We may develop future products that are regulated as medical devices by the FDA. Government authorities, primarily the FDA and corresponding regulatory agencies, regulate the medical device industry. Unless there is an exemption, we must obtain regulatory approval from the FDA and corresponding agencies before we can market or sell a new regulated product or make a significant modification to an existing product.