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Snap values itself at nearly $24B with its IPO pricing
- knd775 10y agoThat's a number that makes the $3B Facebook offered them look quite small.
- bherms 10y agoRobinhood has bids starting at $16 on the IPO... I have no clue if it's a smart buy. Anyone care to chime in?
- pcurve 10y agoThis is far more risky than FB IPO. How high it goes is anybody's guess (outside management team). Trying to wrap my head around why this is any different than Twitter.
- soVeryTired 10y agoIt's much much closer to a 50/50 gamble than a smart buy: all intra-day trading is, unless you have a quantifiable competitive advantage.
- elsewhen 10y agothis valuation expert from NYU puts the value at $13.3B (dramatically lower than the stated IPO price) http://aswathdamodaran.blogspot.com/2017/02/a-snap-story-valuing-snap-ahead-of-its.html http://aswathdamodaran.blogspot.com/2017/02/a-snap-story-val...
- argonaut 10y agoHe's quite often wrong: http://aswathdamodaran.blogspot.com/2012/02/ipo-of-decade-my-valuation-of-facebook.html http://aswathdamodaran.blogspot.com/2012/02/ipo-of-decade-my...
- albertwang 10y agoNote that on Robinhood you're only entering a "pre-ipo" bid but are not participating in the ipo -- i.e., you aren't guaranteed that your order will fill at any point Source: https://support.robinhood.com/hc/en-us/articles/115000902306-Pre-IPO-Trading https://support.robinhood.com/hc/en-us/articles/115000902306...
- chollida1 10y agoThey are pricing right at the top of their range with this if the rumors are true. I don't think they are announcing hte actual price until after the close. One one hand raising as much as possible is very nice for the company but to temper that sentiment I think it was Robin Li, the Baidu founder, who made the comment that while he was very happy with the first day pop his stock had, it was an actual curse. he was prepared to run an XX Billion dollar business and hit his targets but with the opening day pop he was now running a 2X Billion dollar business and that made things significantly harder than if the stock had risen gently over the course of 4-8 quarters. I wish the Snap team well, but they'll have a few hiccups coming. They've been private long enough that a deluge of shares will come free trading this year and they'll at some point have to do the tight rope walk of switching from telling wall street to look at user growth to looking at profits. If you want to invest I'll quote someone sitting beside me. "The problem with Snap is determining if they are more Twitter or Facebook." From a wall street perspective this IPO was a bit different. It was about 10x oversubscribed, which is alot but not uncommon. What was interesting was that alot of mutual funds got almost full allocations and hedge funds were shut out compared to what they would normally get. Maybe this is a good thing?
- brangalinafoeva 10y agoNot really because they're non-voting shares so they don't need to give a damn what Wall Street say.
- notadoc 10y ago> "$59 million in revenue in 2015 to nearly $400 million in 2016" Valuation at 60x 2016 revenue with no profit? Oh boy. Aside from that, who uses Snapchat?
- GavinMcG 10y agoPeople under 25.
- muhfuhkuh 10y ago>who uses Snapchat? You're kidding, right? It passed 300 million monthly users almost a year ago. We're all tech fuddy-duddies here, still stuck on linkedin and email FWDs, we don't know nuttin' bout dat snap.
- jonknee 10y ago> You're kidding, right? It passed 300 million monthly users almost a year ago. And not much more since then... Growth fell of a cliff once FB started to focus on copying their features (see Instagram Stories).
- notadoc 10y agoRight but aren't many kids using Instagram and other Facebook products now that they have adopted the Snapchat features? That's what I keep hearing anyway, no idea if it's reality or not.
- DanBC 10y ago>> who uses Snapchat? This doctor: http://www.bbc.co.uk/news/technology-38314539 http://www.bbc.co.uk/news/technology-38314539 > UK teaching surgeon Dr Shafi Ahmed has "livestreamed" an operation using Snapchat spectacles, which are sunglasses with a small camera integrated, allowing the wearer to record what they are seeing. (I think he had the @NHS twitter account for this week (27th March through to 5th April)
- trevyn 10y agoHah, he kept the dark sunglass lenses in, too.
- curiousgal 10y agoI see 0 value in Snapchat. Besides, how is it even being monetized? Edit: I meant 0 value as in 0 added value. See mrweasel's comment below for more details on the second point.
- accountface 10y agoHow is Twitter being monetized? Facebook? Uber? Instagram? Say what you will about valuations in general, but Snapchat is rare in that they've produced a physical product and set some sort of future goal in hardware (specifically cameras). So If everyone else gets a C, I'd at least give them a C+.
- aianus 10y agoWhy is Uber in that list? They provide a service to consumers in exchange for money, unlike the rest of your examples and Snapchat.
- accountface 10y agoUber is Uber because of software. Take it away and you have a cab company that exploits contractors (which based on the history of cab companies is really saying something). The last Uber I ever took was a 20 minute drive that cost me $3.75 — I had a conversation with my driver about his cut of the fare, and tipped him because I felt guilty about how absurd it had become. Uber's recent losses are unparalleled and largely stem from driver subsidies because they aren't actually charging a sustainable fare for the service they contract. I honestly don't think they're a real company. It's all a farce.
- j-walker 10y agohttps://www.nytimes.com/2017/02/17/technology/snapchat-ipo-video.html https://www.nytimes.com/2017/02/17/technology/snapchat-ipo-v...
- askafriend 10y agoYou don't see value in an engaged audience of nearly 300 million people using a product regularly? Really? Zero? I think that's an incredibly unfair and naive thing to suggest to be honest.
- philfrasty 10y agoAnyone knows their growth numbers since the introduction of Instagram Stories? For influencers with a following in the 18+ age range this was the day a lot quit Snapchat (including myself).
- econner 10y agoThis techcrunch article has what you're after: https://techcrunch.com/2017/02/02/slowchat/ https://techcrunch.com/2017/02/02/slowchat/. They say growth slowed from 7% QOQ to 3.2% QOQ. Having only 3.2% Q4 QOQ growth is pretty worrying considering they had ~14% QOQ growth in every prior Q4.
- MorePowerToYou 10y agoSerious question: are the growth numbers scrutinized? How exactly are they calculated? It seems like down-playing growth numbers pre-IPO could leave more room for "awesome growth" in the first few post-IPO years. Maybe switch the way the numbers are calculated at the appropriate times.
- pavlov 10y agoPeople are asking if Snap is more Twitter or Facebook. From my (light) exposure, it doesn't seem like either. It's more like a lifestyle-aware replacement for Apple Messages + Camera -- two of the most heavily used apps on any phone. (For Android, replace Apple Messages with whatever Google calls their text chat app this week.) The closest comparison could be WhatsApp, and that was valued at $19 billion. So I'm not sure that Snap's valuation is as outrageous as it seems based on traditional metrics. Also, I've been really impressed by the design of the Spectacles. The yellow charging case is a brilliant way to make the glasses lighter. Snap is the only major tech company that understands anything about playful design -- Apple, Google, Facebook and Microsoft are all treading the same safe paths of post-Jobsian blandness.
- seanmccann 10y agoI think when people say is Snap a Twitter or Facebook they are wondering if it will +350% or -60% in the first few years after IPO.
- hkmurakami 10y agoOr user growth.
- pavlov 10y agoMaybe it will be neither? I could well see Snap sitting at roughly its IPO price or slightly below two years from now. That's the risk of a high-priced initial offering -- the success will need to be extraordinary to drive the stock still higher.
- iLoch 10y agoSnap's data has real value, like Facebook's. For most of their users, they have a large portion of their phone's contacts (whether you opt in or not is irrelevant due to your contacts opting into this + a network effect.) They also have media preferences based on what articles you're watching/reading. They also know who you're most interested in (who's stories you're watching most, and who you send/receive snaps from the most) and what their interests are, so they can potentially infer interests from that too, even if you don't read articles. They have location data turned on for most of their users thanks to geo filters, and if they've been "good" data miners, they're sending your facial mapping home when you do a face filter effect. I'd be surprised if Snap doesn't have the most comprehensive faces database out there with all the angles they get from selfies (though they may not have the most unique faces.) Oh yeah, and they also have the perceived privacy that Facebook doesn't have. Deleting messages doesn't actually delete them, but it just feels better when they're gone, so people are more candid on Snapchat. Not to mention they've also done an excellent job monetizing their features thus far, with very little intrusion that I've noticed as a user. You get the occasional ad when you're looking through stories, but most of the money is coming from things like sponsored content and geo filters, which users don't complain about.
- mattmaroon 10y agoIf you have a large amount of money you don't mind gambling with and can afford to stay solvent longer than the market can stay irrational, I feel like this is the best short ever. My 5 year target on SNAP would be roughly one can of Pringles. When the next market meltdown happens, Michael Lewis will write a great book about people buying non-voting shares of a fad company at a $24b valuation that says in its prospectus that it has no plans to make money and maybe never will. Or I'm wrong and they won't be a fad and will figure out how to monetize, but I feel like the multiplied probabilities of both make it as clear a bet as you ever get.
- econner 10y ago> My 5 year target on SNAP would be roughly one can of Pringles. What does this sentence mean?
- nooron 10y agoSnapchat is Comcast for your face, without the need for pipes. They want to own the distribution of video content on mobile (and eventually AR), whether it comes from your friend or from NatGeo. Right now, it's hard to get started on Snapchat for small vendors. It makes a lot more sense for large companies. This differentiates its strategy from Google and Facebook in a big way -- it's more demand generation (which FB also serves) than end-of-pipeline marketing. I am not sure how this limitation affects its growth potential. Thoughts? Will they open it up to smaller clients? How will the limitations of the format affect ads?
- exclusiv 10y agoI'm sure they will open it up more broadly at some point. Right now they can ensure that the big brands create more compelling ads and have control over it. We'll definitely see more portrait video content moving forward. Do you know if the ads they started running are forced viewing? Are they injected like interstitials before you can digest your friends' content? If so, that's compelling for an advertiser but likely to kill the service IMO, as young people will easily defect.
- nooron 10y agoYes, there are now interstitials. They are not mandatory though -- you can swipe past.
- trungonnews 10y agoSNAP will be the best short once it crossed $50B market cap.
- oculusthrift 10y agoOver the past years(as a new grad) I thought that I would've killed to work at Snapchat, Fitbit, Uber, or Twitter. Now, I wouldn't touch any of those companies with a 50 foot pole. I've grown extremely cynical about startups and the extreme hype that surrounds them. That being said, at Internapalooza this year, the longest line there was for SnapChat and every young person seemed enamored with them. And I remember a time where everyone was screaming that Facebook would fail because of it's lack of profit or that Twitter was the next Facebook/Google. This is all a long way of saying that no one knows what the hell they are talking about when they discuss these companies. Whether that's posters on HN, financial talking heads, or even successful people in Silicon Valley. If you have some advantage on the market, and can predict the correct valuation of Snapchat, then: 1. Put your money where your mouth is. Buy or short the IPO. 2. It's probably wise to not share your take as it relinquishes the advantage you think you have on the market. 3. Hope you stay solvent longer than the market stays irrational. Just remember, these same "experts" said that no one needed DropBox when they had wGet.
- umeshunni 10y ago> long way of saying that no one knows what the hell they are talking about when they discuss these companies And in some cases, they have vested interests in the success or failure of these companies.
- MorePowerToYou 10y agoNone of those companies are start-ups. Companies that are truly start-ups have little to zero revenue and little to zero name recognition. The companies you mentioned have passed the start-up phase but have yet to reach the Goliath phase (Amazon, Google, etc). They all have/had escape velocity and are/were on the upwards trajectory.
- oculusthrift 10y agoWell yeah, but they were at least more of a "startup" a few years ago when I wanted to work there. My main point was: look how they turned out despite the hype or industry experts predictions.
- quickben 10y agoMy take: The most important thing is the non voting shares. Big money will be staying away from that IPO.
- sushid 10y agoCompletely untrue. The IPO is already 10 times oversubscribed. [0] [0] http://video.cnbc.com/gallery/?video=3000597530 http://video.cnbc.com/gallery/?video=3000597530
- quickben 10y agoAs I say, that was my assessment. I just wanted to be friendly and share my views. But, people are free to do whatever they want with their money. Just keep in mind that Snap isn't AMD, and snapchat CEO+board inspire opposite of confidence with their public statements. I won't even go into their financial predictions, aspirations and what they plan to do with the money. Just because the capital is oversaturating lately, doesn't mean all IPOs will go up.
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- owenversteeg 10y agoSomehow I've managed to see exactly zero comments about Whatsapp stories in this thread, which really surprises me. I think that's a hell of a lot more scary to Snapchat than Instagram stories. Most people with Instagram have Snapchat, but most people with Whatsapp do not have Snapchat. For those who don't know (and I don't know much) Whatsapp just launched a stories feature, similar to Instagram or Snapchat.
- askafriend 10y agoYou're also forgetting Facebook stories which is a stories feature for the main Facebook app that inserts the stories in a spot right above the newsfeed. FB have effectively copied the stories feature across all of their media properties (FB/WhatsApp/Instagram). I'd imagine they'll eventually add the ability to cross-post selectively.
- exolymph 10y ago> I think that's a hell of a lot more scary to Snapchat than Instagram stories. Most people with Instagram have Snapchat, but most people with Whatsapp do not have Snapchat. Neither of these sentences is accurate.
- owenversteeg 10y agoThe first one's an opinion. In the second one, 'most people with Whatsapp do not have Snapchat' is just simple math - there are more than twice as many Whatsapp users compared to Snapchat. 'Most people with Instagram have Snapchat' is anecdotal, sure, but do you think that more than 50% of Instagram active users do not actively use Snapchat? I only know a handful of people that have Instagram that do not have Snapchat, and only two of those people are active Instagram users. From your profile I can see you're a reporter, so if you have any access to hard data about this I'd love to hear what the real numbers are. Thanks!
- exolymph 10y agoInstagram has ~400 million DAUs whereas Snapchat has ~160 million. Even if 100% of Snapchat users have Instagram accounts, it's still not most Instagram users. Maybe you're indexing on a different number, rather than DAUs? Wasn't objecting to the part about Whatsapp, you're right there!
- nimos 10y agoI don't see that snapchat has the lock-in to make it worth the risk. Sure you can leave other social networks and it's always a risk but Snapchat's ephemeral nature seems to make that risk much much worse. That said I only used it for a week before I got annoyed by it so maybe I don't have the best perspective.
- symlinkk 10y agoPeople my age (22) just use Snapchat to flirt or post pictures of parties. No one - and I mean no one - ever checks out the articles in the Stories section of Snapchat. I really don't see any way for them to make money at this point.
- bostik 10y agoWhat I find really interesting in that number is that according to Matt Levine the IPO has been already oversubscribed 10 times.[0] This kind of number strongly implies that one can expect the immediate post-IPO valuation to be quite a bit higher. However, once the aggressive stock flippers are done, there's no telling where the stock price finds its equilibrium. 0: https://www.bloomberg.com/view/articles/2017-03-01/snapchat-indexes-and-free-research https://www.bloomberg.com/view/articles/2017-03-01/snapchat-...
- zachrose 10y agoI don't use Snap products, but from my totally uninformed, unengaged vantage point it seems to me that Snap is valuable because they present a different set of values to their users then Facebook, Google, etc. Their first product wanted to challenge the permanence of our digital stuff. (Forget the underlying technology.) The glasses are about challenging this kind of Google/Apple model of the person as some elegant cyborg from the Jetsons. They offered a toy for, like, just goofing off. I imagine users like it because it's not crammed with ads and spam yet. $24B is about half of what it costs to build high speed rail from LA to SF, or a third of what it might cost for a manned mission to Mars. Compared to what it probably costs to operate and develop, $24B sounds redonkulous. Compared to those other projects, it's hard to see what Snap has that's so rare. Maybe the better comparisons are Nike (market cap $95B) and Coca-Cola ($182B). Snap is using near-commodity economic inputs and outputs to express a point of view and build a brand. All of this is speculation from my deep crater of ignorance.
- ChrisArchitect 10y agoWhat I don't understand about this is if I'm using Instagram Stories, just because I happen to be an active instagram user....why would I ever switch to Snapchat other than audience? I can get alot of the same audience on Instagram already. Stories does the trick mostly