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What Snap’s Old-School Prospectus Says About the IPO Market

Ah, IPOs. I’ve missed you so.

Back in the day you were a dime a dozen, but also my source of comfort and bemusement. Before the dot-com bust, I used to pore over the prospectuses announcing your arrival like a Talmudic scholar searching for meaning. The so-called S-1 registration statement you filed with the U.S. Securities and Exchange Commission was so rich with detail. It showed your hopes and dreams and, better, your weaknesses.

I fondly recall some of my favorite S-1s. There was the pointless Pointcast (of blessed memory), which would build a media empire from “push” notifications. But it didn’t. And there was Webvan (also of blessed memory), whose S-1 showed such impressive spending prowess. It spent itself into the ground. I also recall the S-1 for eBay. At The San Jose Mercury News a career ago I told readers that when eBay went public they should believe the hype. I got many of these wrong, but I got that one right.

I’m taking my trip down memory lane about you, IPOs, because the “camera company” (per its S-1) Snap Inc. publicly disclosed its going-public intentions Thursday. What fun it will be to watch you go, Snap Inc. Your user growth rate is slowing, your presumed price-to-sales ratio is enormous (Fortune’s Jen Wieczner breaks this down), and your governance is, well, horrible. Founders Evan Spiegel and Bobby Murphy have no intention of giving up control of their brainchild. Ever.

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This is exciting, though, because Snap in a weird way is going all old-school on unsuspecting retail investors. Back when IPOs were plentiful it was hip for issuers—that is, companies issuing stock—to lose money. That way folks at home, clicking on their online brokerage accounts, could pretend to be venture capitalists. Snap is losing gobs of money. It’s full of promise. It’s wonderful.

Facebook was no fun when it went public in 2012: It already was profitable. So was Google in 2004. Snap isn’t making money. But it is discussing “sexting” in its S-1, which is extremely cool.

Welcome back, IPOs!