iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
16,044 Blog Posts

KING UNICORN TO COME PUBLIC: WILL YOU BUY $SNAP ON THE OPENING TICK?

Snapchat is the only relevant social media platform for my son, who is 20, and his friends. They love the damned thing — and view Twitter as something foreign and retarded. The only issue with $SNAP is the valuation by which is intends to come public.

I find it humorous that the company just flippantly had their valuation reduced by their underwriters from $25b to $20. Hello, that’s a 20% haircut. I guess it’s not a big deal when the company is coming public at 20x sales — representing the highest valuation of any social media stock. I blame the venture capitalists and of course the bastard underwriters. No one will make money on this stock for at least 6 months. But I must ask, will you buy at the opening tick in the hopes of seeing the company grow out of their absurd valuation and/or catch lightening in the bottle by way of momentum squeeze higher.

Source: CNBC

Co-founder and chief executive Evan Spiegel, and chief technology officer Robert Murphy, will hold 88.5 percent of the voting structure after the IPO. This is because they hold Class-C stock, which has voting rights. The Class-A shares going on the market have no voting rights.

“Mr Spiegel and Mr Murphy, and potentially either one of them alone, have the ability to control the outcome of all matters submitted to our stockholders for approval, including the election, removal, and replacement of directors and any merger, consolidation, or sale of all or substantially all of our assets,” the filing said.

Snap’s IPO is being closely watched as it could set the tone for other technology offerings in 2017. Last year saw a dearth of U.S. listings, but experts are predicting that the market could thaw this year.

Snap makes its money through advertising and will need to convince potential investors that its app is not just a fad. In 2016, the company generated revenue of $404.5 million, a sixfold increase on the $58.7 million made in 2015, according to a regulatory filing with the U.S. Securities and Exchange Commission. However, net losses widened to $514.6 million last year, from $372.9 million the year before.

At the end of 2016, Snap had 158 million daily active users, up 48 percent from the same time the year before. But in the fourth quarter of 2016, year-on-year growth of users fell, which Snap put down to increased competition as well as product performance issues stemming from updates to its app.

$SNAP is expected to price on March 1st, 2017.

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19 comments

  1. natehois

    I’d rather $SNAP my fucking neck.

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  2. rigged game

    SNAP isn’t worth 20 million let alone 20 billion.

    Who the fuck wants to watch a 15-year-old girl
    sticking her tounge out?

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  3. og

    Not on opening day, but there will probably be a good run in this.

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  4. it is showtime

    no tripledigits
    no naz recordhigh
    no spy recordhigh
    you couldn’t get another consecutive

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    • natehois

      I like you,
      I think your hearts in the right place…
      But for the love of christ can you take a fucking English 101 class cause you make no sense ever.

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  5. mspm

    I believe it’s valued at 48X 2016 revenues……..crazy

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  6. john_galt

    Do they actually sell anything? Or is it just ads space?

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  7. the raconteur

    It takes a special kind of business to lose more money than it books in revenue…. TWTR had near 70% gross margins when it came public if I recall and SNAP isn’t even profitable on that metric. It spends way too much money making retarded ads and content for media companies and it will never scale.

    That said, I hope it trades up so I can short it.

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  8. mr.wiggles

    I snap all the time. Its the best (most fun) platform, by far.

    Off to go train. Track workout tonight.
    Fly, meet me there. We’ll run a fartlek together.

    Anyone run ultras here?

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  9. JakeGint

    46x Revenue, axe-u-ally (sic).

    Sick.

    ____

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  10. masteroneass

    Don’t get it myself. I think it’s just a fad. I can’t figure out how they generate any revenue or even what the utility of it is that isn’t already on the internet but with super cheesy graphics. That being said it has a bad image like twitter. If twitter got rid of the explicit content (twitter for explicit) then they would do better. People don’t like investing in things that cause not socially acceptable behavior. Half their articles are not normal topics and are geared towards adolescents. The whole thing is bizarre and childish.

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  11. zola

    Galloway the Great says that the Snap IPO rings the bell at the top. And he suggests that the Amazon “Other” category is 3X the Snap ad RevNew. But wait wait there is more : at 2:02 the Kerplump is hilarious! Sort of a comment on the expected result of the yippeeyoh. KeyeYeyeYippeeYeyeAye!!

    https://youtu.be/uIXJNt-7aY4?t=2m0s

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