Biggest Initial Public Offering Since 2014

Snapchat’s new Spectacles

Snapchat (SNAP) is looking to raise money with their IPO, and investors are excited. They hope to raise between 19 to 22 billion dollars. The future of this company is unclear though as their new user rates have dropped since Instagram knocked off Snapchat’s storyline feature. That, and they are still in the red taking massive losses with a $500 million net loss with $400 million revenue.

Despite that, their growth is on a good clip compared to their expenses. They are hoping that future sales of their new product, Spectacles, will make up for the current position they are in. The stylish glasses are being sold for $130 each, and are still in the process of being rolled out. The first round of glasses being distributed through pop up stores and vending machines, they were able to create grassroots excitement. However, they admitted in IPO filings that the glasses were not making them profit right now, “The launch of Spectacles . . . has not generated significant revenue for us” and states “We expect to experience production and operating costs related to Spectacles that will exceed the related revenue in the near future”.

DESPITE THAT, the excitement buzzing around their new product is promising. The Spectacles might actually take hold in the tough market of wearable technology, where Google’s (GOOG) Glass failed. Smart watches have already surmounted the immediate obstacles of having technology that is fashionable and functional enough to justify wearing. The Google Glass was clunky, cyborgish and did not let people know when they were recording, so people were uncomfortable with them. The snap glasses solves these issues with fashionable design for the aesthetic, and a glowing red led light for when the glasses are in use and recording.

This is the most excitement around an IPO since Ali Baba (BABA), but its hard to tell where things will land after recent experiences with other new web and tech firm IPOs such as Twitter (TWTR), Facebook (FB), GoPro (GPRO), and Fitbit (FIT). Of which, only Facebook is pulling through with value. Funny, they own Instagram.

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