Breakingviews: Snap IPO draft sounds more like GoPro’s than Facebook's

Breakingviews
Richard Beales
Pedestrians hold umbrellas while walking past a Snapchat sign displayed outside of the New York Stock Exchange.
Michael Nagle | Bloomberg | Getty Images

The parent of the Snapchat smartphone app thinks it's "a camera company." It's almost as if its initial public offering filing on Thursday – which may raise up to $3 billion and see the company valued at up to $25 billion – was somehow confused with GoPro's from a few years ago, when the camera-hardware maker said it was in the media business.

The purveyor of disappearing messages has some big things going for it that GoPro didn't have. Social-network services have a tendency to be winner-take-all propositions, and Snapchat is one of the winners. It is growing exponentially, too: revenue, at just over $400 million in 2016, was nearly seven times as big as in 2015.

That kind of statistic helps justify huge technology-sector valuations. There's plenty of room for growth in revenue per user, if Snap gets it right. At just over $1 per user per quarter, that's in the same ballpark as Facebook when it went public in 2012, and Mark Zuckerberg's $385 billion giant has pushed that up to nearly $5 in the most recent quarter.