Messaging app Snapchat filed to issue 25 million new shares, signaling a possible new round of funding or plans to acquire another company.
A regulatory filing by Snapchat today and shared with Fortune by VCExperts.com did not give a reason for the new Series E share sale. But for the past few months, there have been a number of reports about a large new funding round.
The latest report stated Kleiner Perkins Caufield & Byers will invest $20 million into the company at a $10 billion valuation. Prior to that, reports named Alibaba, which today disclosed pricing plans its massive IPO, as a potential investor.
Today’s regulatory filing authorizes a share count of 42 million, up from 17 million. It also reclassifies Snapchat’s common stock into two groups, Class A Common and Class B Common. This follows the initial authorization of Series E shares, which occurred in July.
The move is a curious one, because both the Series D and Series E shares in Snapchat are valued at $.001 per share. Those cheap shares carry little voting power, and sit that the bottom of the liquidation stack, according to Justin Byers, director of business intelligence at VCExperts.com. The low share price is sometimes used as a placeholder for startups prior to an IPO. Snapchat’s messaging app is popular but has not begun to monetize, so an IPO is not likely.
Snapchat has disclosed $163 million in funding, the latest of which came from Coatue Management in late 2013. The company did not respond to a request for a comment.
Last year, Snapchat turned down a $3 billion acquisition offer by giant Facebook and, instead, decided to push ahead as an independent company.