Snap: a unicorn that should stay in the forest

Snap, the company behind mobile-phone messaging app Snapchat, beloved of teenagers and young adults, plans a $25bn initial public offering in March. And while Snapchat is widely seen as a way to send explicit photos, "no one can accuse Snap of being a cheap thrill", says the Financial Times' Lex column.

Facebook, which has 1.2 billion users and revenues of $27bn, is valued at 14 times sales. Twitter, with 150 million users and revenue of $3bn, trades on four times sales. Snap has 168 million users and revenues of $400m, which would put it on 60 times sales even though it lost $500m last year.

Yet profitability doesn't matter, says Jim Armitage in the Evening Standard. Rational thought has been swapped for "the naivety of the emoji generation". "Investors conclude that, because their teens say it's cool, it must be worth a billion dollars. Or $10bn. Or $25bn [smileyface]."

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Worse still, investors "are not being offered voting shares", adds Alistair Osborne in The Times. Evan Spiegel, Snap's 26-year-old chief executive, "expects you to cough up without having any say whatsoever in how he runs the group".

The IPO is a "throwback to a pre-Facebook technology era, when companies went public on promise, not on financial reality", concludes Shira Ovide on Bloomberg. Snap is floating too early. It would be better off "staying in the lush forest of magical startup unicorns" for a while longer.

"There's not a chance we'd consider a London float," David Brown, the founder of London-based digital advertising "unicorn" Ve Interactive, tells the Evening Standard, due to the UK's "negative attitude to loss-making tech firms". Instead, he's looking to New York. Ve's recent funding round valued it at $2.7bn, but its results show a £16.5m loss. Brown is undaunted. "We're more confident than ever before of producing probably one of the biggest successes the UK's ever seen."

The financial crisis began ten years ago this week, says Patrick Hosking in The Times, when HSBC issued its first profit warning in 142 years and admitted that US borrowers were "defaulting in greater numbers than expected and it couldn't be sure things wouldn't get worse". The consensus then was that it "didn't matter terribly much", but we now know that this was a warning of what was to come. There are echoes of that today in the markets' "benign attitude" to Donald Trump. Every time he opens his mouth "he emits the kind of warning signals you'd expect to spook investors badly". But, just as happened ten years ago, "the markets are refusing to be rattled". Let's hope that this time they're right.

Retail magnate Ken Morrison, who died last week, lost control of his empire due to the bungling of the authorities in 2003, says Neil Collins in the FT. When Wm Morrison agreed a £3bn takeover of Safeway, rivals Tesco, Sainsbury's and Asda all expressed an interest in buying Safeway themselves. It was clear that wouldn't be allowed, but the "lumbering" Competition Commission took six months to reach this "glaringly obvious conclusion". By that time, "Safeway was a shambles", with "devasting" consequences for Morrisons, leading to five profit warnings in 12 months. "It took five years before recovery was complete. Sir Ken hung on, but his power had gone."