Snap is asking investors to put a $25 billion valuation on 2 people
You can read Snap's IPO filing for yourself here.
The short version is that Spiegel and Murphy are considered indispensable to the company, and that they'd retain total control over the company, even if one or both of them were fired by the board of directors - which, thanks to their high degree of control, would only happen if they turned on each other.
And if one of them dies, then nine months later, the remaining cofounder would be able to "exercise voting control over our outstanding capital stock."
In other words, the filing indicates that there is no Snapchat with Spiegel and Murphy, and their control is going to last for a very long time.
The important bits about Spiegel and Murphy from the filing are as follows:
- CEO Evan Spiegel owns 21.8% of the company, the filing shows, making him the largest shareholder along with CTO Robert Murphy who owns the same amount. "Our two co-founders have control over all stockholder decisions because they control a substantial majority of our voting stock."
- "While Mr. Spiegel, as CEO, has been responsible for our company's strategic vision and Mr. Murphy, as CTO, developed the Snapchat application's technical foundation, should either of them stop working for us for any reason, it is unlikely that the other co-founder would be able to fulfill the responsibilities of the departing co-founder," says the filing.
- According to the filing, Spiegel and Murphy have both signed employment agreements, meaning they can theoretically quit or be fired by the board of directors at any time. Given their control of the company, it seems that the only way for one of them to be fired would be in the unlikely event of one turning on the other.
- Even if one or both of them is fired, "they will continue to have the ability to exercise the same significant voting power and potentially control the outcome of all matters submitted to our stockholders for approval."
- If either Spiegel or Murphy passes away, their Class C stock will convert into Class B stock nine months later, and "the remaining co-founder will be able to exercise voting control over our outstanding capital stock."
On a weird, morbid note, the filing also notes that "Mr. Spiegel and Mr. Murphy are high profile individuals who have received threats in the past and are likely to continue to receive threats in the future." In other words, Snap is warning that the two men may be facing danger from crazed fans.
Mark Zuckerberg wields a similar kind of total control over Facebook. But, it should be noted, back in June 2016, Facebook changed its rules such that he'd relinquish that control if he leaves the company for any reason.