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Wall Street is salivating over the upcoming public debut for Snap Inc.
And who can blame them?
The initial public offering (IPO) for this developer of the popular instant-messaging service Snapchat will likely be huge.
And I'm not exaggerating.
Once shares begin trading as soon as next month, Snap could be valued between $21 billion and $25 billion – making it the largest U.S. tech IPO since that of Facebook Inc. (Nasdaq: FB) back in 2012. That's a figure that could serve as a big catalyst for the rebounding IPO market.
Also salivating: thousands and thousands of retail investors… and maybe even you.
But hold on…
As a longtime Silicon Valley insider, I love IPOs. If you're an investment banker, venture capitalist, or company insider, you can make a fortune with them. (Plus, nothing keeps a bull market running like popular new issues that bring fresh cash out of the sidelines.)
However, most investors should avoid buying Snap – or any other company going public – at the open.
At that point, you're likely to pay top dollar and very well could see the value of your investment drop immediately and steeply.
But we've got a way around that.
In fact, we've got a way to cash in on the Snap IPO with none of that risk.
It's an investment that will bring you many years of profits.
2017's Blockbuster IPO
In May 2015, Snap CEO Evan Spiegel announced he intends to take his company public. Although he didn't offer many specifics at the time, it was the first time any company official mentioned going public.
Although we don't have an exact date yet, we know most of the specifics.
You can find them here, in an excellent free guide to the Snap IPO – its recent financial performance, its shareholder rights, etc. – that my colleagues at Money Morning put together.
Started as a class project for Stanford University in 2011 by then-students Spiegel, Reggie Brown and Bobby Murphy, Snapchat has grown to become one of the fastest-growing social media platforms ever.
It currently has more than 160 million daily active users. That's significantly better than what Facebook was doing at this point in its history.
Over its pre-public life, Snap raised nearly $2.63 billion over eight rounds of funding from 24 investors, including Glade Brook Capital Partners, Benchmark, General Catalyst Partners, Kleiner Perkins Caufield & Byers, Lightspeed Venture Partners, and SV Angel.
Snap, which will be traded on the NYSE under the SNAP symbol, made $404.5 million in 2016, which beat analyst estimates of $350 million by 15.42%.
By 2017, it could generate nearly $1 billion in revenue. By 2018, it could generate nearly $2 billion.
However, Snap isn't profitable right now…
It generated $58 million in revenue for 2015 but reported a net loss of $372 million.
In 2016, Snap reported a net loss of $514 million.
That's a 38% year-over-year increase in net losses.
Beyond the usual hazards that come wi…
About the Author
Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.