Snap. Inc (SNAP), the parent company of the Snapchat social media app, is looking to raise $1 billion in debt via convertible senior notes with a due date for maturation of Aug. 1, 2026. The maturity date indicates when the note will be paid back with interest to holders, who can choose to be paid in cash or stock. 

Snap said the proceeds would be used for "general corporate purposes, including working capital, operating expenses, capital expenditures" and to "acquire complimentary businesses, products, services or technologies."

Snap Inc. stock dropped today due to the announcement, with this the first time the company will add long-term debt to its balance sheet. The Los Angeles-based company had better-than-expected financial results for the second quarter in July, with revenue of $388 million and a less-than-expected loss. The social media giant hopes to achieve profitability this year. 

Snap has said that the initial purchasers of the debt securities will also be offered to buy up to an additional $150 million principal amount of notes.

The idea of raising debt as a corporate strategy isn't uncommon. Coworking space company WeWork, which lost $1.9 billion last year, announced that it would raise billions of dollars ahead of its upcoming IPO offering. Netflix (NFLX)also frequently raises debt to produce exclusive content. 

Snapchat is a multimedia messaging app which was created in 2011, and features short video and photos that can be sent to other users, known as "snaps."

Snap Inc. had its IPO in March 2017.