After a successful Q2, Snap announces plans to raise $1B in debt

Snapchat plans to raise $1B in debt to help expand the company’s production as the company tries to convince investors it can hang with the big dogs.

August 8, 2019

Snap Inc. had a rough ride after going public in 2017. The company ran into corporate and product setbacks, and after a controversial redesign, it appeared the struggling social giant might never rebound.

But, after better-than-expected earnings in Q2, some analysts believe the business may Snap back after all.

Now, to prove to investors that it’s got the chops to roll with big dogs like Instagram and the Chinese-owned karaoke app TikTok, the company plans to raise $1.1B in debt to fund operating expenses.

It’s like a half-court shot before heading into halftime…

Snap shocked Wall Street in its Q2 earnings report last month by narrowing its quarterly losses to $255m from $353m YoY and increasing total view time on its Snapchat Discover platform by over 60%.

The company’s stock also rose ahead of the earnings report, and then an additional 12% afterward.

With the new funding, the numbers have snapped back to reality

Shares fell as much as 2% after Snap announced plans to scale its operations. But, if the numbers hold true, the move may be worth it.

Snap’s other flagship products — like AR and its new 3rd-party software kits — saw huge success in Q2 as well, and, with its addition of 13m daily active users to the Snapchat platform, the company hopes to use the cash to keep riding its newfound wave of success.

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