Publications
Publications
- October 2017 (Revised April 2024)
- HBS Case Collection
Snap Inc. Goes Public (A)
By: Lynn Sharp Paine and Will Hurwitz
Abstract
Snap Inc.’s chairman must decide how to address investor concerns about the company’s unprecedented plans to issue only non-voting shares in its upcoming IPO. The case is set in early 2017 following the public availability of Snap’s IPO filing with the U.S. Securities and Exchange Commission (SEC). It describes the company’s meteoric rise from its conception by its young founders in 2011 to its multi-billion dollar valuation. When Snap filed for its long-anticipated IPO that could value it at more than $20 billion, it described its plans to go public with three share classes providing public investors shares with no votes on matters customarily put to a shareholder vote and allowing its two co-founders control over such matters. The case details the checkered history of multiple share class structures, highlights arguments for and against them, and explores the potential implications for index funds. Investors managing over $3 trillion sent a letter to Snap Chairman Michael Lynton and Co-Founders Evan Spiegel and Robert Murphy asking them to reconsider the share structure just one day after the company’s S-1 was made public. As controversy mounted and with the IPO possibly just a month away, Lynton must decide how to respond to the investors’ letter.
Keywords
Ethics; Capital Structure; Corporate Accountability; Governing and Advisory Boards; Corporate Governance; Going Public; Business and Shareholder Relations; Leadership; Management; Mobile and Wireless Technology; Venture Capital; Technology Industry; Telecommunications Industry; Information Technology Industry; United States; California
Citation
Paine, Lynn Sharp, and Will Hurwitz. "Snap Inc. Goes Public (A)." Harvard Business School Case 318-042, October 2017. (Revised April 2024.)