Is Snapchat’s Valuation Crazy? Yes. It is.
Your teenager’s Snapchat is less than a week away from becoming a portfolio piece. The company plans to list 200 million shares on the New York Stock Exchange under the ticker SNAP, in the range of $14 to $16 per share, valuing the photo-based social media platform at $23 billion. When it list on March 1, it will be the largest U.S.-listed technology offering since Chinese e-commerce site Alibaba (BABA 68,82 -0,79 -1,13%) went public at $168 billion in 2014.
Market valuation and strategy consultancy Brand Finance said Thursday that it estimates Snapchat’s brand to be worth around $1.7 billion. The firm’s CEO David Haigh said blamed low revenues and margins and “an unproven ability to monetize the platform substantively.”
Snapchat is just another social media brand, competing with Instagram, Twitter and Facebook. Users post pictures, they’re viewed, then disappear. Worth noting, a previously popular social media platform for video postings, called Vine, is no longer in business as of Oct. 27.
Snapchat doesn’t even rank in Brand Finance’s top 100 most valuable technology brands. Their report can be seen here. Google, Apple, Amazon, Microsoft and Facebook are the top five. Snapchat pictures are here one minute, gone the next, but “Over-excited investors certainly won’t feel the same about their cash,” Haigh warns.