The social networking industry has gone from novelty and whimsical to incredibly fast-paced and competitive. Facebook is arguably the undisputed king in the social networking arena. However, up and coming online entities like Snapchat are giving Facebook a serious run for its money. Snapchat itself is not without its fair share of controversy at least if the public can believe a recently fired Snapchat employee. This person’s claims could unseat the company as the best contender for Facebook’s crown.
The Controversy Behind Snapchat’s Rising Success
Snapchat is one of the fastest growing social media networks today. However, its growth is linked directly to its cutthroat practices and unscrupulous desire to take advantage of potential investors, at least according to what a recently fired employee says. That former employee, Anthony Pompliano, also used to work for Facebook before he was lured away from and hired by Snapchat. After three weeks on the job, the company fired Pompliano for what it said was incompetence.
However, Pompliano argues that the only reason he was fired was because he was not willing to give up Facebook’s secrets to the rival company, primarily what practices Facebook utilized to become as large and successful a company that it is today. When Snapchat found out that he was reluctant to disclose that information, he was fired and consequently slandered so that he could not find another job in the social networking industry.
The company, of course, denies these allegations and says that the firing genuinely stemmed from Pompliano’s failure to perform in his new role at the company. Both sides continue to levy accusations at each other, which should be either proven or put to rest for either side once the court answers the legal action filed by Pompliano against Snapchat. The outcome of the legal action could have a negative impact on Snapchat’s pursuit to obtain an IPO and go public in March 2017. It wants to quiet the allegations and prove its innocence so that this case does not impact the value of its stocks.
The Lucrativeness of a Snapchat IPO
The social platform has more than 100 million users, a number that is higher than the number of people who signed up for Twitter and Pinterest. This fact alone makes the company one of the most lucrative investment opportunities if or when it gains an IPO and goes public in March 2017. In fact, the company was initially valued at $17 billion before it sought out an IPO. It is now valued at more than $25 billion, putting it in the same league as Google before that company went public.
Another factor that is increasing its value centers on its new technology that it plans on introducing to the public soon. For example, Snapchat has developed sunglasses that can take pictures and videos, allowing people to enjoy better mobility with the app. The sunglasses are expected to be called Spectacles.
Finally, Snapchat aims to make it easier for potential investors to find them on the stock market, which could maximize the number of people who put money in the company. To enhance its appeal to the public stock market, Snapchat has shortened its name from Snapchat to Snap, Inc.
What Happens Now?
Investors are taking advantage of stocks in social networking companies. The unquestioned leader in the social media networking is Facebook; however, it is being challenged by upstarts like Snapchat. The social platform could unseat Facebook as the most lucrative social networking company in the world. However, before it can accomplish this mighty feat, it must settle a case with a former employee who calls into question the company’s integrity and honesty in its pursuit of an IPO.
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