Snap’s long awaited S-1 filing is now public. There’s a lot of media buzz about the nuances of the filing which is exactly what Snap wants. Looking at the major social media players, I think Snap will benefit the most from going public. This is because Snapchat’s user base is mainly 18-34 year old people. The goal over the next few years is to bring in older users. Going public will give it traditional media coverage and interest from potential investors which will get older adults to try the app that their kids love, for the first time.

The most obvious aspect of the S-1 form that jumps out at me is that it describes itself as a camera company. I get worried when a company tries to re-define itself to investors. Snap is clearly a social media company which has developed unique features that augment reality such as lenses. Instagram is a photo sharing app which has filters as a core function, yet it doesn’t call itself a camera company. Snap did release a glasses product with a camera on it, but that was a very small product launch compared to its 158 million daily active users.

Snap’s redefinition of what type of company it is reminds me of GoPro. GoPro ironically wanted to redefine itself away from being a camera company. It called its cameras capture devices and played up its content as a new revenue stream. GoPro didn’t want to be viewed as a camera company because hardware firms inevitably have low margins. Camera companies haven’t been successful in the past (think Kodak). Being a social media firm sounds like a better description considering Facebook’s success. Maybe Snapchat knows it won’t be able to reach the mass appeal Facebook has and wants to avoid comparisons with it. Comparisons to Facebook have certainly hurt Twitter, but I wouldn’t say that’s the principle cause of its demise. Even if Facebook didn’t exist, Twitter would still be a company which isn’t profitable and has slow user growth. That would never get investors excited in any circumstance.

These are the logical questions one must ask when a company does an IPO claiming it’s a camera company without having a camera as a product. Will it release hardware cameras in the future in addition to Spectacles? To be fair to Snapchat, the fact that when users open the app, the camera function is the first screen, is a brilliant functionality decision because it encourages content creation. Snapchat needs users to keep creating content because the photos/videos delete either immediately or after 24 hours. When users don’t have a story, their account looks empty; this makes users want to upload more content. This strategy is perfect for social media. The only risk is if the app loses popularity, people will have nothing to watch and the app will become useless quickly. Facebook would still be useful to learn more about people even if original content sharing slowed (which appears to be happening).

Another interesting aspect of the S-1 filing is the description of the service as “delete by default.” This refers to videos and photos deleting after they are sent. Snap describes why deleting content automatically is great (it makes taking pictures/videos less stressful). It goes on to discuss the Memories product which it says has increased its cloud storage costs. To me, Memories is the antithesis of what Snapchat claims to be. It’s an ephemeral photo sharing app which decided to allow users to save their photos on it. I don’t see the benefit of this feature unless the company plans to make them public. This would end the app’s ephemeral nature. The way I see this feature is it either is a cost which doesn’t provide any returns outside of slightly increasing time spent on the app or it represents a new direction for the company which goes away from the core feature of “delete by default.”

The nitty gritty metrics of the S-1 are the most important part. The two metrics I will discuss in this article are time spent and daily active users. On average, users spend 25-30 minutes per day on Snapchat and visit the app 18 times. 25% of daily active users upload to stories every day and 60% use the chat service every day. Users over 25 visit Snapchat 12 times per day and spend 20 minutes on the app. Users under 25 spend over 30 minutes per day on the app and visit over 20 times per day. This is impressive. These are Facebook-type metrics among younger people. As you can see below, 18-34 year old users about 35 minutes per day on the Facebook. Facebook is having trouble with younger users which gives Snapchat some wiggle room. The problem is Snapchat’s future growth is expected to come from older users which is Facebook’s bread and butter. The competition is steep.

The 158 million daily active users Snapchat has, grew 48% from last year. Some media outlets are emphasizing Snapchat’s mention of times recently where it had flat user growth, but that’s a result of growth being lumpy, not that the product has reached saturation. I take solace in the fact that the reason Q4 had slower growth in DAUs was because the rest of world category slowed. North American users are the most valuable to Snap and are the closest to saturation. Therefore, I’d be more concerned if that was slowing. Twitter only has 67 million monthly active users in North America. Snapchat has 68 million DAUs which makes it already bigger than Twitter and it’s still growing fast. It appears there were technical difficulties with the Android app which is what hurt the rest of world’s growth. They were resolved by the company and growth resumed.

It’s unfortunate that the company went public after coming off a relatively weak quarter. Q3 had year over year DAU growth of 62%. I’m guessing the quarter after the company does its IPO, there will be a surge in user growth. That may make the stock worth buying for a momentum trade. Since it lost $514 million last year and has makes no guarantees it will ever be profitable, investing in it seems too risky.