Snapchat grilled by skeptical investors ahead of IPO
Snapchat’s management team have been grilled by investors ahead of the businesses much anticipated IPO, as they sought to assuage concerns over bitter competition from Facebook, user growth and poor reach in developing markets.
Parent firm Snap has set itself the target of raising as much as $3.2bn from what would be the biggest tech IPO since Facebook, forcing executives to mount a global charm offensive to be sure of reaching the higher echelons of its valuation.
As part of their sales pitch Snap officials have produced a canary yellow pitchbook for hedge funds while management from CEO Evan Spiegel down serenade suits over sandwiches and coffee.
Snap is hoping to achieve a valuation of between $19.5bn and $22bn when it floats, emulating the soaring stock of Facebook but is having to work hard to fend off concerns that it is more likely to be bracketed with the becalmed Twitter after posting a sudden slowdown in user growth.
At stake are perennial issues of how Snap intends to monetise its user base, accentuated by a sharply slowing growth rate which fell to just 48 per cent versus a year earlier in the fourth quarter.
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