Snap To Use $1B Offering For Working Capital, Future Acquisitions

Looking to raise some additional cash, Snap is proceeding with a private offering of $1 billion in convertible senior notes.

The notes will be scheduled to mature in 2026 unless they are repurchased, redeemed, or converted before that date.

The self-described "camera company" also plans to grant initial purchasers of the notes an option to buy up to an additional $150 million principal amount of notes.

The publicly traded company is earmarking the funds raised for “general corporate purposes,” including working capital, operating expenses and capital expenditures.

Snap says it might also use some of the cash to buy what it’s calling “complementary businesses, products, services or technologies.”

Snap isn’t revealing what companies or assets it is currently eyeing.



After a few tough years, Snap appears to have regained its financial footing, while proving its service is more than a fad.

Last month, the company reported better-than-expected earnings and user growth for the quarter ended June 30.

Revenue rose 48% to $388 million year-over-year, with a gross margin of 46% -- a substantial improvement over the 30% reported the prior year. It posted a loss of 6 cents per share, versus an expected loss of 10 cents per share.

Snapchat added 13 million daily active users, for a total global user base of 203 million.

Snap also reported last month that it's finally seeing positive results from improvements to its long-troubled Android app.

For example, on most Android devices, newer Snapchat users are sending 7% more Snaps than were sent on the previous app version. Snap views this metric as a positive predictor of long-term retention of these newer users.

In addition, Snap said it is continuing to invest in its Discover platform, with a particular focus on building a sustainable premium content ecosystem.

Attempting to reach broader audiences, Snap also began rolling out its first global, paid media campaign. The campaign, which positions Snapchat as the best social platform for communication and self-expression with users’ “real friends,” will feature both typical Snapchat users and "personalities" to carry the message.

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