But looking past the (big) numbers — $400 million in revenue in 2016, 158 million daily active users — there are a lot of questions about where Snap is going and how the IPO will shape its future. On this special bonus episode of Too Embarrassed to Ask, The Verge’s Lauren Goode sat down with Recode’s Senior Social Media Editor Kurt Wagner to get those questions answered.
(Shout-out to listener Alex Hardy, who gave us the idea for this bonus episode. Details on how to get our attention for future podcasts below.)
Wagner explained why one number in particular, the five million new users Snapchat garnered in the fourth quarter of 2016, caught his attention. That’s a sharp slowdown from the seven-digit user increases Snap saw in every previous quarter that year.
“It was right around the time that Instagram and Facebook really started copying a lot of the features that Snapchat has,” he said. “I think if you’re a realist here, maybe a pessimist, you might say, ‘Are Facebook’s efforts working? Are they slowing down Snapchat before it even gets to the public markets?’ I think that’s a valid concern. That was a little surprising.”
Wagner also demystified the three different classes of Snap shares, which have some sharp differences in influence that have made some investors wary. Only two people — CEO Evan Spiegel and co-founder Bobby Murphy — have “class C” shares, which are worth 10 votes apiece and give them 88 percent control of the company.
“What you really need to know if you’re going to invest in Snapchat is that you’re not going to be able to vote for anything,” Wagner said. “‘Class A’ is what you’re going to be able to buy on the public market, and that comes with zero votes.”
“Very similar to a Facebook or a Google, if you’re investing in Snapchat, you’re essentially investing in Evan Spiegel and Bobby Murphy and hoping that those two are going to make decisions that are good for the company and good for investors,” he added.
This is a bonus episode of Too Embarrassed to Ask, and if you’re looking for more, we have new episodes every Friday. Don’t miss last week’s regularly scheduled show, in which Lauren Goode and Recode’s Kara Swisher talked to CNN’s Brian Stelter about the rise of fake news.
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This article originally appeared on Recode.net.