Snap's IPO Draws Comparison To Twitter, GoPro

Snap's upcoming initial public offering is drawing some comparisons to Twitter Inc TWTR and GoPro Inc GPRO — and not in a good way.

Snap's user growth is cooling down while losses are raising. However, the company is doing a good job at demonstrating year-over-year revenue growth. According to a Bloomberg report, Twitter boasted the same profile ahead of its own IPO.

After Twitter's IPO investors started to realize advertisers aren't as optimistic on the social media as they were in the past and see no need to spend more on the platform.

Granted, Twitter made some mistakes in its IPO, including comparing itself to Facebook Inc FB. Snap appears to have learned from Twitter's errors and is now positioning itself as a "portfolio company" with business lines including the core Snapchat app, a wearable video camera called Spectacles and much more to come.

Snap is also distancing itself from being labeled as a social media company and argues it is a "camera company." In fact, the word "camera" is mentioned 79 times in its IPO filing.

GoPro Comparisons

GoPro, the maker of wearable action-video cameras, held its much anticipated IPO in 2014 and offered a similar investment profile compared to Snap: capturing memories as they happen from the raw perspective of the user.

However, GoPro's business cooled down after its IPO and the company re-invented itself as a media company looking to monetize content that its user base generates and selling space to advertisers in the video.

It has yet to be seen if Snap's business will follow that of GoPro.

"Twitter went out for their IPO and in their road show just talked about how ubiquitous they were going to be,'' Brian Wieser, an analyst with Pivotal Research Group told Bloomberg. "I think if Snapchat embraces that it's a niche platform, it could be a good thing.''