Snapchat’s Expected IPO: Will It Tank Or Save The Business?

This May, 24 year-old Snapchat (CHAT - pending) CEO Evan Spiegel confirmed that his company needs to IPO, in order to avoid a takeover by a larger company. Facebook (FB) and Twitter (TWTR), with Apple (AAPL) and Google/Alphabet Inc. (GOOG) before them, paved the way for online/mobile app IPOs. The main question is whether or not the public listing stands to save or to bury the company.Snapchat has both a solid user base and a sizeable valuation quota. By the CEO's own account, the app can boast some 100 million users and was valued at $15bn after its latest funding round. Speculation regarding the final valuation even has the company pegged at over $29bn. As noted by The Guardian, this is more than the $3bn Facebook offered the Snapchat CEO in 2013, in a purchase offer.Snapchat's particularity is that it allows users to delete snaps (text messages, pictures, videos, etc.) instantly, only allowing the recipient to view them once. This, of course, makes it useful for a specific type of pictures, which have garnered the app a lot of media coverage. Puritan sentiment aside, dating today is not quite what it used to be. The scene is ruled by Tinder, OKCupid, Ashley Madison, and Arrangement Finders, so the trend in favor of instant intimacy gratification should come as no surprise.So, should you purchase CHAT stocks, when they hit the market? Many commenters are on the fence about it and cite the company's low financial performance. A snapshot of the company's 2014 financial performance, obtained by Gawker and presented by Business Insider explains that the company only made $3.1 million last year, and lost $128 million.According to the balance statement in question, the company's biggest non-paycheck expenses were $47 million on product and $13 million on outside services, whatever those may have been. And, while this is not necessarily an argument in favor of trading CHAT stocks, it's important to note that the startup aligns with other similar companies, in terms of financial performance.Uber, valued at $50bn, made only $104 million in 2013, though its performance for Q1 and Q2 of 2014 raked in $102 million. Forsquare only generated $2 million in its first year of making a revenue. Pinterest lost its head of partnerships and Snapchat itself saw the departure of its COO, former Instagram CEO Emily White. And, perhaps most importantly, during its first year as a public listing, Facebook made precisely $0 from mobile use. Facebook's situation has since dramatically improved, with most of its current revenue coming from mobile.On the upside, the balance sheet also shows that Snapchat is basically marketing itself for free, since its budget in this respect stood at under $1 million last year. And its cash reserve is a comfortable $320 million.Ever since that announcement in May, Snapchat representatives have been particularly tight-lipped about future plans for the company. Yet, one telling sign, which might give you an indicator of how urgent the situation is, is Spiegel's own comments on the current tech bubble. Speaking on the subject of tech investments, the CEO finally addressed a subject he had previously dodged: money is being poured into ever-riskier investments and, at some point, the market is bound to correct itself.Until that does, though, Evans seems poised to cash in on what trading money is left on the market. And when he does, CHAT stock might be worth looking into-but if, and only if, the young CEO comes up with a viable monetization plan for the company.