The Snapchat parent set a price range of $14 to $16 a share Thursday, which would give it a market capitalization of between $19.5 billion and $22.2 billion.
The company, which filed for an IPO earlier this month, was widely expected to be valued at between $20 billion and $25 billion, giving it the richest valuation in a USA technology IPO since Facebook Inc. According to a schedule obtained by Business Insider, the IPO is expected to price on March 1.
Snap, which brings in the bulk of its revenue from advertisements in filters and promoted stories on Snapchat, could use the funds from an IPO for acquisitions of additional virtual-reality companies.
Snap, which made its fame with an app that sends ephemeral photo and video messages, describes itself as a "camera company".
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Snap had a net loss of $514.6 million on $404 million in revenue for the year ending December 31, 2016, compared to a net loss of $372.9 million on $58.7 million in revenue in the prior year.
Morgan Stanley & Co LLC, Goldman Sachs & Co, JP Morgan Securities LLC, Deutsche Bank Securities Inc, Barclays Capital Inc and Credit Suisse Securities (USA) LLC are among the underwriters to the IPO. By the fourth quarter, average daily active user growth fell below 50% for the first time since at least 2014, according to the deal prospectus. A year ago the company introduced its first hardware product, camera glasses called Spectacles that retail at $130. Holders of class B stock are entitled to one vote, and it is convertible into one share of class A stock. The filing also shows how the company has evolved over the past few years.
The industry has been keeping a close eye on Snap Inc since the upstart published details of its forthcoming IPO back in January in the form of an S1-filing which promised growth but not profit in the short-term. Net losses widened to $514.6m from $372.9m in that period.