Social networking sensation Snapchat has filed for an initial public offering that could value the company at between $20 billion and $25 billion, according to a sources cited by Reuters.
The Californian company is said to have made its filing with the Securities and Exchange Commission under legislation that allows organizations with less than $1 billion in revenues to keep their financial details confidential.
However, the company was in May reported to have raised $1.8 billion in a funding round that valued it at roughly $20 billion. An IPO valuing Snapchat at between $20 billion and $25 billion would be the largest US tech listing since Facebook's $81.2 billion IPO of 2012, says Reuters, and could happen as soon as March.
Snapchat allows users to share photos and short videos and has taken off among teenagers, who regard it as a trendy alternative to the more established Facebook service used by their parents.
It has won praise from a number of analysts, including Ovum Ltd. 's Rob Gallagher, who reckons Snapchat has a much better chance of cornering the fast-growing market for user-generated content than Google (Nasdaq: GOOG)-owned YouTube Inc. .
"They'll miss out on personal videos -- the videos you now see on Snapchat will never turn up on YouTube," Gallagher told attendees at Ovum's Digital Futures event in London last month. (See YouTube to Lose in User-Generated Content Battle – Ovum.)
Others, however, have sounded worried about the company's business model and reliance on advertising revenues. Many of Snapchat's users appear to have limited interest in the professionally produced content to which advertisers are typically drawn.
There is also some concern about the environment for IPOs this year, given a decline in IPO proceeds and the number of offerings compared with 2015.
The tech sector has also been rocked by the recent election of Donald Trump as the next US president.
Shares in companies including Apple Inc. (Nasdaq: AAPL) and Amazon.com Inc. (Nasdaq: AMZN) fell in the wake of the election result amid fear that Trump's protectionist policies and opposition to immigration could damage their prospects.
The Silicon Valley area, which is home to most of the country's technology firms, has in the past relied heavily on immigrant workers with software and engineering expertise.
One of the sector's best-known figures also has overseas roots. Sergey Brin, one of Google's two co-founders, was born in Russia and moved to the US when he was just five years old.
— Iain Morris, , News Editor, Light Reading