1. How will Snapchat’s upcoming IPO impact its assets, liabilities, and equity?
Original blog posting (February 21, 2017)

2. Snapchat
In 2017, Snap, Inc. filed paperwork with the SEC indicating it was going to issue stock soon
Expected to be the most expensive tech IPO in history – up to $25 billion
Plans to issue class A stock – no voting rights
Private investors own class B shares – 1 vote per share
Founders own class C shares – 10 votes per share

3. Question 1
When Snap issues these common stock class A shares, what impact will that stock issuance have on Snap’s assets, liabilities, and equity?

4. Question 2
Will this IPO have any direct impact on Snap’s income statement? Explain.

5. Question 3
What is the risk to common shareholders from having no voting rights?

6. Question 4
What impact do you think the lack of voting rights will have on the initial offering price?

7. Question Recap
When Snap issues these common stock class A shares, what impact will that stock issuance have on Snap’s assets, liabilities, and equity?
Will this IPO have any direct impact on Snap’s income statement? Explain.
What is the risk to common shareholders from having no voting rights?
What impact do you think the lack of voting rights will have on the initial offering price?

8. For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at Questions or comments? Contact Dr. Wendy Tietz at