In the filing, Snap repeatedly said its user numbers and engagement "can be lumpy and unpredictable" - or the opposite of what Wall Street typically prefers. The Snap team pitched the company's stocks and gave clarifications regarding the spreading concerns.
"One of the challenges that we've encountered over time is to explain to people why bigger isn't better", Evan Spiegel, Snap's CEO and cofounder, said in a presentation to investors ahead of the IPO. You can also read this Investor's Corner on how should you handle Snap's market debut to maximize your chances for success with IPOs.
Snap is looking to raise as much as $3.2 billion this week by selling 200 million shares for between $14 and $16 each. Including unexercised stock options and other convertibles for a total of 1.39 billion fully diluted shares, Snap would have a fully diluted value of around United States dollars 23.6 billion, an unnamed source told Bloomberg.
At the same time, it's important to take into account that technology companies are always trying on new things and working on experiments, but only a few of those projects actually make it to market.
In early February, Snap released its financial statement for 2016, reporting $404.5 million in revenue - nearly seven times the $58 million reported in 2015.
Snap says 158 million people use its Snapchat app daily, but its growth rate has been declining with the advent of competition from Facebook's Instagram. It lost half a billion last year, even more than the $373 million it lost in the prior year. It's also the first to go public among a class of companies, including Uber, Airbnb and Pinterest, that have been valued at more than $10 billion while still privately held. Overall, Spiegel will still be the one who's in control of the company's future.