Snap Inc

Green Mile

What are people’s thoughts on Snapchat’s IPO this week? Shares are reported to start at $14 to $16. Does this capture your interest or should we all stay away from this one

phantom_lord

FB just used Whatsapp and Instagram to replace Snapchat's core (loss making) business. Can't see any reason to get involved.

Sabre Man

The Motley Fool mentioned it in a recent podcast. They generally advise against IPOs and suggest you wait a few quarters to see how it pans out.

https://www.fool.com/investing/2017/02/14/2-reasons-to-stay-far-away-from-the-snap-inc-ipo.aspx

newacc2015

Snap Inc is wholly speculative. Their SEC filings state they dont think they will ever make a profit. IMO it is on the decline already. I personally am getting less snaps than last year. People are moving to instagram etc

Green Mile

I wouldn't write SNAP off. The bull case for Snapchat has been in the strength of its product team and the vision of its CEO Evan Spiegel. It's the innovation behind SNAP that is what is really being pitched.

However, I do agree SNAP are a company with not a lot else going for it but they do have a large user base. Facebook and Instagram are used mainly by 25+ year olds whereas Snapchat is used by the younger generation and used a lot.
Snapchat can still be bought-out by a big company like Facebook or Alphabet.

Anyway, just thought I'd put my thoughts out there. The IPO is today and the price starts at $17.

BrokenArrows

Green Mile wrote: »

I wouldn't write SNAP off. The bull case for Snapchat has been in the strength of its product team and the vision of its CEO Evan Spiegel. It's the innovation behind SNAP that is what is really being pitched.

However, I do agree SNAP are a company with not a lot else going for it but they do have a large user base. Facebook and Instagram are used mainly by 25+ year olds whereas Snapchat is used by the younger generation and used a lot.
Snapchat can still be bought-out by a big company like Facebook or Alphabet.

Anyway, just thought I'd put my thoughts out there. The IPO is today and the price starts at $17.

Yes the snapshat user base is younger but its very hard to monetize the younger people.

Unless they have some new products in the pipeline the snapshat product is not really unique anymore.

Sabre Man

Shares in Snap Inc, creators of Snapchat, are now indicated to open at $22 to $24 per share.

TimeToShine

I'm nearly 100% sure if you buy and hold for a year you will turn an absurd profit.

Nody

TimeToShine wrote: »

I'm nearly 100% sure if you buy and hold for a year you will turn an absurd profit.

Only if you believe the bubble will hold that long; personally I'm more inclined to go with this guy's opinion. My personal opinion is that we're in the tail end of the bubble going up, you can see this between the quality of companies going through IPOs are dropping in quality, more and more hype companies and the fact everyone and their father talk about how you should go into the stocks to make money in daily newspapers while valuation has never been higher.

There's the classic saying that when the London cab drivers talk about the latest rental property they bought you should get out of the property market and the stock market is the same. The bubble will burst but if that's in 3 months or 18 I can't say; either way I'm personally increasing my cash side only of the portfolio for the foreseeable future.

callaway92

Like any Social Media - Drastically over valued before IPO.

Leave it for 6 months, then buy in.

iainBB

Snap chat is worth this with little revenue, crazy keep well away.

TimeToShine

We'll see. I'm following my head which tells me stay away but my heart sees all these teens utterly immersed in this digital age with snapchat ubiquitous and it makes me wonder.

iainBB

TimeToShine wrote: »

We'll see. I'm following my head which tells me stay away but my heart sees all these teens utterly immersed in this digital age with snapchat ubiquitous and it makes me wonder.

I think that's with the real problem you can't really judge how much it is worth until time has passed IPO is so so difficult. I am staying away.

P_Cash

Research other IPOs twt FB, , , better chances are 6months down the line,

Buying in now is only spec.

Ud have been safer buying Nike at low 50s

Sabre Man

Beware:
http://fortune.com/2017/02/28/snap-snapchat-ipo-lockup-investors/

This was mentioned in a recent Motley Fool podcast. The lock-in period for the founders is 180 days.

And growth may be slowing.
http://www.cnbc.com/2017/03/02/another-sell-rating-for-snap-from-wall-street-on-its-slowing-user-growth-high-valuation.html[/u

TimeToShine

I don't think you know what I mean. Just for a second forget the fundamentals, forget metrics, forget revenue. This digital era is like nothing we've seen before. Advertising on TV is dying and everyone is glued to their mobiles, especially kids. Every single armchair analyst and trader thinks the stock is overvalued (us included) and is bound to fail. What we have is an app that has cornered the sexting market (a huge driver in general motivation whether we like it or not) and has the distribution market in its pocket. The under 18s don't use FB anymore, ephemerality is becoming more and more engrained in our society as data protection and privacy issues continue to surface.

I'm not saying you should invest, just think outside the usual metrics for a second. Somebody is ahead of the curve here - all I'm saying is it certainly isn't the traders to be found on "niche" boards (here/reddit/4chan/stocktwits etc.) because everyone posts there now.

I won't be touching it for obvious reasons but I welcome a discussion where we can try and objectively analyse why what is happening is happening rather than regurgitating what every news outlet is already telling us. Just look at bitcoin for a prime example of something logically ridiculous gaining traction because the "analysts" thought it had no value.

Zaph

Just saw this thread popping up on the front page and I thought people might be interested in this BBC News story. Totally redefines the term "nice little earner"!

Prezatch

If the school made 24m from selling two thirds of their investment (10k's worth) how much did the venture capital firm make with 485k invested :eek:

TallGlass

How is FB worth nearly 400Billion ! Data is very valuable it seems... Maybe these sites should be paying users to join

Zaph

Prezatch wrote: »

If the school made 24m from selling two thirds of their investment (10k's worth) how much did the venture capital firm make with 485k invested :eek:

If they sold it all at the same price as the school it was worth $1.16 billion.

Prezatch

Make that 2bn... http://uk.businessinsider.com/how-lightspeeds-jeremy-liew-became-snapchats-first-investor-2017-2?r=US&IR=T

newacc2015

TimeToShine wrote: »

I don't think you know what I mean. Just for a second forget the fundamentals, forget metrics, forget revenue. This digital era is like nothing we've seen before. Advertising on TV is dying and everyone is glued to their mobiles, especially kids. Every single armchair analyst and trader thinks the stock is overvalued (us included) and is bound to fail. What we have is an app that has cornered the sexting market (a huge driver in general motivation whether we like it or not) and has the distribution market in its pocket. The under 18s don't use FB anymore, ephemerality is becoming more and more engrained in our society as data protection and privacy issues continue to surface.

I think when you start implying this is something different and nothing like we have seen before, it is officially a bubble.

I think Snap is very hard to monetize. Yes everyone is glued to it like they were to myspace, bebo and twitter. But they all pretty much failed in the end. How do you monetize snapchat? You can't justify the $24bn price tag based on it will earn revenue from filters and the odd ads in stories in a few years.

Instagram is perfect for monetizing as you stroll through images with ads in them. I just can't see how you can do that with Snap. If they themselves could do it already, they probably would have

An IT firm staying private is the new IPO. There are tons of amazing tech companies who are deciding not to go public despite being profitable and excellent eg Uber, Airbnb, Qualtrics etc.

I personally would be very wary of IT firms going public when the best of the best are choosing to remain private. Snap will likely be Twitter 2.0 ie they never figured out how to monetize it.

jive

newacc2015 wrote: »

I think when you start implying this is something different and nothing like we have seen before, it is officially a bubble.

I think Snap is very hard to monetize. Yes everyone is glued to it like they were to myspace, bebo and twitter. But they all pretty much failed in the end. How do you monetize snapchat? You can't justify the $24bn price tag based on it will earn revenue from filters and the odd ads in stories in a few years.

Instagram is perfect for monetizing as you stroll through images with ads in them. I just can't see how you can do that with Snap. If they themselves could do it already, they probably would have

An IT firm staying private is the new IPO. There are tons of amazing tech companies who are deciding not to go public despite being profitable and excellent eg Uber, Airbnb, Qualtrics etc.

I personally would be very wary of IT firms going public when the best of the best are choosing to remain private. Snap will likely be Twitter 2.0 ie they never figured out how to monetize it.

Agree with much of your post but unless a company plans to go to IPO they will struggle to get talent. Nobody wants 'X' amount of share options which will never be worth anything. The companies you listed will haemorrhage employees unless they at least intend on going to IPO because that's where the employees have a shot of making actual money. I'd bet an arm and a leg the companies listed will at least internally be talking about building towards an IPO.

What I find funny about Snap is their target market is really young, even if they could monetise it it's the wrong market in the IT world.

At the end of the day it's a loss making company although I'm sure they are massaging things to get out of paying tax. Either way there's no proven record and Facebook/Instagram have both adopted the fleeting stories already.

I haven't a clue how it will go but it will be interesting to watch. I think it'll be more Twitter than Facebook.

Sabre Man

newacc2015 wrote: »

I think when you start implying this is something different and nothing like we have seen before, it is officially a bubble.

I think Snap is very hard to monetize. Yes everyone is glued to it like they were to myspace, bebo and twitter. But they all pretty much failed in the end. How do you monetize snapchat? You can't justify the $24bn price tag based on it will earn revenue from filters and the odd ads in stories in a few years.

They're already earning money from ads:
https://techcrunch.com/2016/09/06/report-snapchat-ad-revenues-to-reach-almost-1-billion-in-2017/

newacc2015 wrote: »

Instagram is perfect for monetizing as you stroll through images with ads in them. I just can't see how you can do that with Snap. If they themselves could do it already, they probably would have

An IT firm staying private is the new IPO. There are tons of amazing tech companies who are deciding not to go public despite being profitable and excellent eg Uber, Airbnb, Qualtrics etc.

Uber CEO Travis Kalanick wants “to make sure [an IPO] happens as late as possible,” said in an interview with CNBC last year.
https://www.zacks.com/stock/news/244845/will-uber-be-the-hottest-ipo-of-2017

Airbnb, one of the biggest unicorns with a $30 billion value, finally turned a profit in the second half of last year and expects to make a profit this year. These two factors place the short-term home-rental marketplace on strong footing if it pursues an IPO as early as this year, according to a story in Bloomberg. Airbnb's profit is rare among major unicorns such as Uber, which lost an estimated $3 billion in 2016.
Source: http://www.investopedia.com/news/airbnbs-first-profits-lay-groundwork-ipo/

newacc2015

jive wrote: »

Agree with much of your post but unless a company plans to go to IPO they will struggle to get talent. Nobody wants 'X' amount of share options which will never be worth anything. The companies you listed will haemorrhage employees unless they at least intend on going to IPO because that's where the employees have a shot of making actual money. I'd bet an arm and a leg the companies listed will at least internally be talking about building towards an IPO.

A lot of major IT companies have grey markets for shares. They are traded, just not officially on a major exchange.

I have plenty of friends who worked for major tech companies and a lot have moved to unicorns. A certain type of person wants to work in a tech company. Not everyone wants to work in a bloated bureaucratic tech company just because they are publicly listed. In fact most people want to join the next big start up that will be the next Google or Facebook. You are going to make a lot more getting in on the next hot start up with share options as employee 1,500 rather than the employee 75,000 in Google California alone.

Tech companies used to go IPO as there was not the vast venture capital industry 15-20 years ago.

jive wrote: »

At the end of the day it's a loss making company although I'm sure they are massaging things to get out of paying tax. Either way there's no proven record and Facebook/Instagram have both adopted the fleeting stories already.

I dont think they are massaging the figures, they just dont know how to be profitable. This was in a SEC filing for the IPO

TimeToShine

newacc2015 wrote: »

I dont think they are massaging the figures, they just dont know how to be profitable. This was in a SEC filing for the IPO

Their revenue increased tenfold from the year before whereas their expenses doubled.

I don't disagree with you by any means but saying that they don't know how to be profitable is a bit much, we shall see though.

newacc2015

TimeToShine wrote: »

Their revenue increased tenfold from the year before whereas their expenses doubled.

I don't disagree with you by any means but saying that they don't know how to be profitable is a bit much, we shall see though.

They stated in their SEC filings, that they may never be profitable

http://www.digitaltrends.com/dt-daily/snap-inc-s-ipo-filing-reveals-snapchat-user-count-huge-losses/

phantom_lord

newacc2015 wrote: »

I think when you start implying this is something different and nothing like we have seen before, it is officially a bubble.

I think Snap is very hard to monetize. Yes everyone is glued to it like they were to myspace, bebo and twitter. But they all pretty much failed in the end. How do you monetize snapchat? You can't justify the $24bn price tag based on it will earn revenue from filters and the odd ads in stories in a few years.

Instagram is perfect for monetizing as you stroll through images with ads in them. I just can't see how you can do that with Snap. If they themselves could do it already, they probably would have

An IT firm staying private is the new IPO. There are tons of amazing tech companies who are deciding not to go public despite being profitable and excellent eg Uber, Airbnb, Qualtrics etc.

I personally would be very wary of IT firms going public when the best of the best are choosing to remain private. Snap will likely be Twitter 2.0 ie they never figured out how to monetize it.

They're not profitable companies.

Snap will likely be Twitter 2.0 ie they never figured out how to monetize it.

They have monetized snap, and it's not covering their hosting costs.

Nody

newacc2015 wrote: »

An IT firm staying private is the new IPO. There are tons of amazing tech companies who are deciding not to go public despite being profitable and excellent eg Uber, Airbnb, Qualtrics etc.

Uber is not profitable and are burning cash like mad; they are working on a failed business model and are being slapped around silly in every court room all over the world from their security checks not being strong enough, to not paying enough, to having to hire all the drivers (rather than try to push it all on the drivers to deal with) to not having taxi licenses (and hence the right to act as a taxi). I expect Uber will be hailed as this bubble's boo.com company.

Sabre Man

Snap is tumbling.

For ever odd

Technically it looks like a head and shoulders pattern has formed (more obvious on the shorter time frames).

Suggests $21 if does break down further.

Sabre Man

Earnings report after close today.

http://www.cnbc.com/2017/05/10/look-out-snap-internet-stocks-often-plunge-after-first-earnings.html

Did anyone buy?

Sabre Man

Ouch!

http://www.cnbc.com/2017/05/10/snap-earnings-report-q1-2017.html

listermint

Not much of an ouch moment, same happened to Facebook but they made 8 billion revenue in Q1 just gone.

Some People may not 'get' the technology or appeal but I see hundreds of youth and up on it. It delivering them the entertainment feeds they want in a simple package.

The wind isn't taken out of this for the foreseeable

Prezatch

Ouch indeed. Pre market shows down 23%!

Stinger

wordofwarning

listermint wrote: »

Not much of an ouch moment, same happened to Facebook but they made 8 billion revenue in Q1 just gone.

Some People may not 'get' the technology or appeal but I see hundreds of youth and up on it. It delivering them the entertainment feeds they want in a simple package.

The wind isn't taken out of this for the foreseeable

Instagram will destroy it though. Instagram stories is easier to use and a better interface. It has more users too. Instagram has found solid ways to monetize moments. Snap has yet to figure that out

IMO the management of Snap are pretty useless. One was bitching is the only word to describe it about how they are not going to focus on the poor markets of India and Spain. There are some serious flaws with a company, that does not see one of the fastest growing economies as part of their growth stragety and one that thinks Spain is 'poor'.

http://variety.com/2017/biz/news/snapchat-evan-spiegel-only-for-rich-people-anthony-pompliano-1202028526/

I think Snap is a write off and a potential Twitter ie slowly dies

listermint

wordofwarning wrote: »

Instagram will destroy it though. Instagram stories is easier to use and a better interface. It has more users too. Instagram has found solid ways to monetize moments. Snap has yet to figure that out

IMO the management of Snap are pretty useless. One was bitching is the only word to describe it about how they are not going to focus on the poor markets of India and Spain. There are some serious flaws with a company, that does not see one of the fastest growing economies as part of their growth stragety and one that thinks Spain is 'poor'.

http://variety.com/2017/biz/news/snapchat-evan-spiegel-only-for-rich-people-anthony-pompliano-1202028526/

I think Snap is a write off and a potential Twitter ie slowly dies

Fair point on Instagram

TimeToShine

People said the same thing about Bing and Google + which were supposed to blow Google/Facebook out of the water.

BrokenArrows

I just read that 2 billion of the 2.2 billion loss was due to shares being given to employees including the CEO.

Nody

BrokenArrows wrote: »

I just read that 2 billion of the 2.2 billion loss was due to shares being given to employees including the CEO.

Their financial statement would disagree with that:

2017 Q1 result (in thousands)
Revenue: 149,648
Cost of revenue: 163,358
Sales and Marketing: 805,848
General and Admin: 1,174,476
Total cost & expenses: 2,363,415
Loss from operation: 2,213,767

Simply put they are making sod all money and I'd have serious concerns over their cash burn rate.

keane2097

TimeToShine wrote: »

People said the same thing about Bing and Google + which were supposed to blow Google/Facebook out of the water.

I wouldn't see Instagram - the incumbent with a bigger user base and better product (not to mention Facebook link) - as the Bing/Google+ in this analogy.

callaway92

callaway92 wrote: »

Like any Social Media - Drastically over valued before IPO.

Leave it for 6 months, then buy in.

Hold out for the next three months then lump. May go as low as 10 cent.

Sabre Man

All-time low
https://www.cnbc.com/2018/09/06/snap-sinks-to-all-time-low-falls-below-10-for-the-first-time.html

Is it a fad or does it have a profitable future?

BrokenArrows

Sabre Man wrote: »

All-time low
https://www.cnbc.com/2018/09/06/snap-sinks-to-all-time-low-falls-below-10-for-the-first-time.html

Is it a fad or does it have a profitable future?

I can't image it has a future.

I don't and none of my circle use Snapchat.
I've never used it.

Instagram has this area locked up.

Jim2007

Sabre Man wrote: »

All-time low
https://www.cnbc.com/2018/09/06/snap-sinks-to-all-time-low-falls-below-10-for-the-first-time.html

Is it a fad or does it have a profitable future?

What do you think yourself? Where is you analysis? Why should anyone else do your homework for you? If you don’t understand the stock or it’s value then keep your nose well out of it.

Sabre Man

Jim2007 wrote: »

What do you think yourself? Where is you analysis? Why should anyone else do your homework for you? If you don’t understand the stock or it’s value then keep your nose well out of it.

I'm staying well clear and I'm not looking for anyone to do my homework. I just thought someone might be interested in discussing it.

User growth seems to be disappointing. I am bearish on their future but I could be wrong. However, the share price has falled a lot since the IPO so short term traders might do OK.