As loss-making Snapchat sets its valuation at up to $22.2bn, would you have to be mad to invest in its IPO?

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Chris Beauchamp, a senior market analyst at IG, says Yes.

As the latest tech IPO to come to market, Snap, the parent company of Snapchat, offers the usual combination of coolness, hype and dubious fundamentals. The IG grey market in Snap continues to suggest that the stock will see a pop on the first day of trading, with current estimates suggesting a valuation by the end of the first day of around $26bn.

However, investors with an eye on the long term should be more cautious. Daily active user growth is slowing, while the company’s obsession with marketing itself as a technology firm with a social media arm will only lead to trouble. Wall Street will eventually fall out of love with the company, and will have limited ability to influence decision-making, with shares being issued without voting power.

Snap will face competition from big names like Apple and Facebook and, at present multiples, investors will be overpaying for limited upside. The old cliché, IPO stands for “It’s Probably Overpriced”, has never been more true than in Snap’s case.

Rob Kniaz, founding partner at Hoxton Ventures, says No.

You surely don’t need to be mad to invest in Snapchat at its IPO.

Like every tech IPO, the Luddites come out of the woodwork to scream that the sky is falling and these valuations are insane. Until they aren’t. Funnily enough, when these companies do succeed you rarely hear of the detractors retracting their statements.

Snapchat has a dramatic hold on millennial users in North America and is positioned to be one of the top ways of reaching them with engaging rich-media advertising. The company seems to be well-managed and having a full-time chief executive already puts it well ahead of Twitter, not to mention having more daily active users in the United States, a less-disastrous product, and far less toxic users.

I’m not certain that it will be a long-term winner like Google or Facebook but it’s early innings and I’m not ready to bet against Snap just yet – it has got plenty of mileage ahead of it to excel.