The photo sharing app Snapchat embarked on a new adventure when its parent company, Snap Inc., opened on the New York Stock Exchange. Shares were initially valued at $17 USD, but then jumped 40% to $24 upon the market’s opening.
Snapchat has made its name by offering a free photo sharing service that allows users to send photos with captions or face filters for a set duration, then wiping the message. Users can also send standard text messages using the app, however these are also erased if the conversation is closed.
In past years, Snapchat has struggled with finances, reporting a loss of $515 million USD in the last year. Following these losses, the decision to open up to investors in stocks and shares is no surprise. Snapchat is currently valued in the region of $24 billion USD, although the company has yet to turn a profit on its services. Owners of Snap Inc., Evan Spiegel and Bobby Murphy, are expected to be made into multi-billionaires by the decision. Interestingly, investors will not have any ability to vote on the company’s decisions, unlike in some frequently traded companies.
Snapchat has been challenged on issues such as cyber-bulling and “sexting”, as the app makes sending and receiving mean-spirited or explicit imagery easier and with no record. Trying to combat these issues can prove challenging. Notably, cases such as that of Playboy model Dani Mathers who was charged with invasion of privacy after taking a photo of an elderly lady in a public changing room. The company has tried to tackle these ever-pressing issues, but have yet to create a concrete solution.
A snapshot of the future
These days, places of education and employment require online sensitivity courses that explain the merits and dangers of the Internet. Unregulated platforms such as Snapchat may face difficulty. This could potentially adversely affecting sales and stock prices as investors remain interested in products perceived as more “safe”. This is of course uncharted territory, with Snap Inc. being the test subjects.
With the eyes of the technological and social networking world on them, Snapchat is creating an important precedent. Their actions with security, privacy, and business policies will determine how the financial and technological world could merge.
Article image courtesy of TechCrunch