Snap chief Spiegel hits the road to woo sceptical investors
Snap, the owner of popular messaging app Snapchat, kicked off its first investor roadshow yesterday as it set out to persuade London money managers to back its initial public offering in the face of concerns about its growth prospects, valuation and corporate governance.
The US company, which has yet to make a profit, aims to raise between $19.5bn (€18.3bn) and $22.3bn (€21bn) from listing on the New York Stock Exchange, after cutting its initial target of $20-$25bn last week following investor feedback. Investors at Monday's event said Snap's 26-year-old ceo Evan Spiegel gave a sleek presentation. However, they were disappointed there were no projections on the company's future revenues or advertising share. "That's the million dollar question and we won't find out for some time," said one potential backer on his way out from the hour-long event. "Management did a good show, they were very convincing," said one attendee.
Los Angeles-based Snap also plans roadshows in New York, Boston and San Francisco. It expects to price its IPO after the US market closes on March 1, according to a confidential document seen by Reuters.
Some fund managers have said they will stay away from Snap given its decision to adopt a three class share structure - the first of its kind - that will mean shareholders who buy in through the IPO will not have any voting rights.
Others were less worried, though. "Snapchat offers a cocktail of hype, insane valuations, dubious fundamentals and weak governance. However, the same was said about companies like Google and Facebook when they listed," said Geir Lode, head of global equities at Hermes Investment. (Reuters)