Snap's IPO to be haunted by Twitter and GoPro

Snap has gone to great lengths to distance itself from comparisons to Twitter, the last big social media public offering.

 

In its filing for an initial share sale, the maker of the Snapchat mobile app emphasised that it measures itself by daily active users — a metric that Twitter doesn’t disclose. Snap explained that its users tell stories chronologically, unlike the Twitter timeline, which displays most recent posts first. The younger company also said it plans to focus on developed markets, instead of racing to find users all over the world. Snap calls itself a “camera company,” rather than focusing on its messaging app or media content.

 

No matter the positioning, Snap’s numbers raise the same questions Twitter’s did. User growth is slowing and losses are mounting, but revenue gains are a bright spot. That’s how Twitter’s financial details looked when it filed to go public in 2013, and the investor concern has never subsided, even after a spate of executive departures made way for new management and initiatives to jump-start user growth. Twitter’s revenue started to slow when advertisers realised that with stagnant user growth, there wasn’t a reason to spend more.

 

Snap is also trying to avoid one of Twitter’s IPO mistakes. Twitter compared itself in strategy to social media giant Facebook, but ultimately it paled in contrast to its rapidly growing rival, and has gotten punished by investors since then. Instead, Snap frames itself as a portfolio company, the owner of the Snapchat app and the Spectacles wearable video camera.