Case summary/description
Snap is the company behind the popular social media platform Snapchat. Set in early 2024, the case describes the story of Snap since 2017, when the company went public by issuing nonvoting shares. The case focuses on the evolution of Snap’s cash flow and capital structure from 2017 to 2024. It provides an opportunity to discuss topics such as sources and uses of funds and the role of strong founders in technology companies. The case also describes Snap’s unique capital structure, which involves a combination of nonvoting shares, convertible notes, equity-based compensation, and regular share buybacks.
Learning objectives
- Learn how to perform analyses of sources and uses of funds.
- Understand capital structure policies such as convertible issuance and share buybacks.
- Learn about the specific strategic and financial challenges faced by new technology companies.
- Understand the pros and cons of dual-class share structures.
- Practise discounted cash-flow valuation.
Details
Author | Daniel Ferreira |
|---|---|
Publication year | 2024 |
Case number | 1 |
Industry | Social Media, Technology |
Geography | Global |
Keywords | Cash flows, capital structure, dual-class share structures, convertible debt, funding needs, IPO, equity analysis, discounted cash-flow valuation, share buybacks, equity-based compensation, founder-controlled companies |
