Why Snapchat's valuation calls on investors to cover their eyes with rose-tinted filters

To value Snapchat requires the whimsical sort of filters the disappearing-photo app company has made famous. All the various tallies, even at a specified share price, call on investors to cover their eyes with heart-shaped, rose-tinted lenses.

There has been plenty of hype around parent Snap's initial public offering, and new issues have been relatively scarce. During the company's brief road-show over the past week or so, news reports suggest excitement is building. That could mean it prices on Wednesday evening above the indicated $14 to $16 a share. Even within that range, though, defining a headline valuation is tricky.

Traditional methodology says the market capitalization is up to $18.5 billion. That's just the top of the price range multiplied by the number of shares to be outstanding after the IPO – 1.16 billion of them, excluding optional extra shares that could also be sold.

Snap had, however, promised nearly 240 million shares to employees as of Dec. 31, including 37 million – worth nearly $600 million – as an IPO bonus for boss Evan Spiegel.

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