An IPO roadshow is when a company looking to begin publicly trading by putting out their initial public offering tours around and lets potential investors speak personally with company figureheads, and the IPO roadshow for Snap is shaping up to talk a pretty big game, if reported inside sources are to be believed. According to alleged insiders, bankers and publicity people for Snap plan to point out parallels between Snap founder Evan Spiegel, late Apple co-founder Steve Jobs, and Facebook founder Mark Zuckerberg. This isn’t just to put on a good show, mind you; Snap is looking to bust out their IPO at a significantly higher multiple of their yearly ad revenue estimate than either Facebook or Twitter did when they went public, meaning investors are performing a far larger leap of faith.
In 2011, Facebook managed to pull down $3.7 billion in ad revenue, and they were able to launch their IPO at the end of the year at a multiple of about 19.4 times their revenue. Snap, meanwhile, has projected ad revenue for 2017 of $940 million, and they’re looking to launch their IPO at some 26.7 times that. A pill of such enormous proportions may prove difficult for investors to swallow, but Snap is insisting that multi-faceted advertising opportunities will ensure that investors don’t regret their decision. In particular, Snap seems set to throw some shade Twitter’s way in pointing out what they don’t intend to do; Twitter’s 2013 IPO was not exactly a disaster, but in the intervening years, their value has crashed, their user base has stagnated, and they have a failed sale under their belt.
Snap came from humble beginnings, with Spiegel simply looking to create a social networking app that wouldn’t leave a “paper trail” that allowed people’s past social exploits to haunt their futures. A few years later, Snapchat is a massively popular app, and the company has even launched their first hardware product, Snapchat Spectacles. Snap’s lofty goals may end up making for a nail-biter of an IPO, but the company seems as ready as they’ll ever be to earn the money they’re asking investors for and then some.