Snapchat's IPO Leaves Unanswered QuestionsSMU SMC

Snapchat’s IPO this week leaves a lot of unanswered questions for the social media giant itself and the industry: will they grow and be bigger than ever or will they fizzle out like those that came before them? As social media companies go public or become acquired by other internet giants, some win by increasing followers and revenues and market share. Others lose by becoming obsolete and not growing with the changing interests and needs of its users. Only time will tell if Snapchat will be as successful as Facebook, or if their IPO will end in a flop like it did for Twitter.

Social media companies are at the mercy of not only technological advances, but also the whim of its users and competitors. Snap’s success prior to their IPO has led other industry giants such as Facebook, Inc. to follow their lead by implementing their own version of disappearing videos on Instagram, for example. Facebook saw that Snapchat’s millions of daily users kept coming back to the photo app for a reason and wanted to capitalize on the temporary photo sharing phenomenon.

Undergoing acquisitions and IPOs is nothing new for tech giants that we all know and use in the social media industry, but success and growth in users and profits is not commonplace. Facebook has continued to be the king of the industry through it’s acquisition of Instagram and steady increase in monthly users. However, ever since their IPO in 2013, the still-popular Twitter has not seen returns and increases in usage as it’s valuation expected them too. Right now, Snap’s shares were trading at about $27 on Thursday once they hit the market according to The Wall Street Journal. The hype from knowledgeable Wall Street traders as well as everyday Snapchat users is making this IPO highly publicized and scrutinized.

The founders of Snap are two 20-something year old guys who have stumbled upon the revolutionary concept of Snapchat. Now they’re ready to take their billion-dollar empire to Wall Street and the public. All we can do now is sit back and watch whether Snap will continue to be a trailblazer in the social media industry, or if it’ll fade to mediums of the past like MySpace and Tumblr.

Check out these links for more information:

https://www.wsj.com/articles/snapchat-investors-found-their-golden-goose-in-a-field-of-turkeys-1488537002

http://blogs.wsj.com/moneybeat/2017/03/04/who-bought-snap-shares-millennials/