When Snap, the maker of Snapchat, officially goes public next month on the New York Stock Exchange, the company hopes to raise more than $3.6 billion by selling shares of its stock to the public.
Most of that money will go into Snap’s coffers to help pay for things like office space, new hires and potential acquisitions- and to help cover the billions the company plans to spend on cloud servicesover the next five years with Google and Amazon.
If Snap can sell its stock at the high end of its $14 to $16 price range, the company should pocket roughly $2.5 billion on the IPO.
But that means a large sum of money, just over $1 billion, isn’t going to Snap.
To Snap’s co-founders, board members and early investors, a number of whom have decided to sell their personal shares in Snap as part of the IPO.
Snap is able to price its stock at $16, as it hopes.
It’s not uncommon for executives and investors to sell some of their shares as part of an IPO.
Facebook insiders actually offered to sell more shares than the company did during its IPO back in 2012.
All of the shareholders listed above will still own substantial stakes in the company after the IPO. Co-founders Spiegel and Murphy will each be worth multiple billions and control more than 88 percent of the company’s voting power.
Source: recode
