5 ms·

It is amazing how a few analysts can change how much a company is valued on the stock market. Has the opinion about Snapchat on tech forums like this, whose opi

by soheil 10y ago

It is amazing how a few analysts can change how much a company is valued on the stock market. Has the opinion about Snapchat on tech forums like this, whose opinion should matter since we're literally the people who built it have significantly changed since two days ago to justify a 4 billion dollars price change?

DougN7 10y ago
There are many of us techies who think it's rediculously over priced. It's cool with teens because their parents aren't there. Teens are fickle and will move on, especially if parents show up (or those teens stay around long enough to become the parents). I give it 10 years.
- soheil 10y ago
  Unless they morph into something different or maybe try to be everything for everyone which seems to be the strategy nowadays, e.g. FB, Amazon, at least Amazon completely dominated the book sector before morphing.
  - beager 10y ago
    To me this was apparent in their corporate rebrand as Snap Inc. Threading the needle and parlaying your hype into a diversified, profitable holdings corp is the formula they seem to be following. IMO Amazon got there naturally, FB took big, deliberate steps to get there, and Twitter is not getting there fast enough. I'm bearish on Snap at current numbers, but willing to see how they play their position for long term growth. (I have no positions, this is not investment advice, reality is a construct of the human mind etc)
  - deleted 10y ago
    [deleted]
- foota 10y ago
  I disagree, I think snapchat will be less vulnerable to the "parents are there" effect because it's more about messaging than it is profiles.
- erikpukinskis 10y ago
  So you're saying it will get turned over to the parents, at which point it will become worthless? Like Facebook?
  - edblarney 10y ago
    "at which point it will become worthless? Like Facebook?" Every company goes through the hype phase. What is 'left over' is usually the raw utility of the product. 'Parents' got onto Facebook and continue to use it = some degree of utility. Teens 'stay on' because of the ubiquity of it. Snap is not Facebook. It's very possible that 'parents' never go onto snap, because it offers them little outside of messaging. 'Sharing moments' is just not what people > 30 care to do that much. Maybe some, but not likely a critical mass. Furthermore - even these features are somewhat faddish among the young. There is a very real possibility that Snap is a huge fad, with very little underlying utility. Now - Snap is different. They refer to themselves as a 'camera company' so maybe they can keep innovating, but I'm doubtful. But if they position themselves as an 'aspirational youth brand' - then they might stay relevant. Think: Nike, Lululemon - they make pretty good gear used by 'real atheletes/yoga types' - which gives the brand enough validation for you and I and other chumps to pay $$$ for their gear while we sweat it out. They are LA based, which is good for that. Also - those 'snap glasses' - even though they were not very 'useful' - actually were a brilliant bit of marketing, and hit the zeitgeist of relevance perfectly. So either/or: 1) They make an app that appeals to 'everyone' - which I doubt. 2) They continue to innovate in 'camera/sharing/experience' perpetually, which I doubt. 3) They can stay cool. Which I also doubt, but wouldn't put it pas them. Again the issue is also real valuation: $25 Billion is a lot of valuation for a company that's not making any money. I don't care what their 'growth' is. What matters is 'how big they can grow, how well they keep customers, and how well they convert on them'. I'm doubtful that Snap - as we see it today is going to grow into commodity usage. Twitter has I think a broader appeal - and look where they are. Facebook did not change that much from after their IPO - the product offer is largely the same. The same thing millenials used, their parents and grandparents used. I don't think Snap can say the same. They could be succesful, but there's a lot more risk in it than say, FB - and that risk should be reflected in the valuation.
    - 10y ago
empath75 10y ago
They didn't. The price went up because dumb money got their first chance to buy the hype and it went down because there is only so much dumb money to go around.
jasonlingx 10y ago
How the market works is the only people whose opinions matter are those who put their money where their mouth is.
iaw 10y ago
Did you read about the lawsuit against Michael Dell after taking Dell private? Essentially he was sued because there was a price differential between the PE firms bid and the "true" market value of Dell, both of which were drastically above Dell's stock price. Valuations of companies are complex irrational things.
weavie 10y ago
I'm not convinced it is just the analysts that change the company valuation. When the price goes down, the media looks to attribute a reason to it. They see the analysts said sell and say that must be the cause. The reality is often a lot more complex.

by soheil 10y ago

DougN7 10y ago

There are many of us techies who think it's rediculously over priced. It's cool with teens because their parents aren't there. Teens are fickle and will move on, especially if parents show up (or those teens stay around long enough to become the parents). I give it 10 years.

soheil 10y ago
Unless they morph into something different or maybe try to be everything for everyone which seems to be the strategy nowadays, e.g. FB, Amazon, at least Amazon completely dominated the book sector before morphing.
- beager 10y ago
  To me this was apparent in their corporate rebrand as Snap Inc. Threading the needle and parlaying your hype into a diversified, profitable holdings corp is the formula they seem to be following. IMO Amazon got there naturally, FB took big, deliberate steps to get there, and Twitter is not getting there fast enough. I'm bearish on Snap at current numbers, but willing to see how they play their position for long term growth. (I have no positions, this is not investment advice, reality is a construct of the human mind etc)
- deleted 10y ago
  [deleted]
foota 10y ago
I disagree, I think snapchat will be less vulnerable to the "parents are there" effect because it's more about messaging than it is profiles.
erikpukinskis 10y ago
So you're saying it will get turned over to the parents, at which point it will become worthless? Like Facebook?
- edblarney 10y ago
  "at which point it will become worthless? Like Facebook?" Every company goes through the hype phase. What is 'left over' is usually the raw utility of the product. 'Parents' got onto Facebook and continue to use it = some degree of utility. Teens 'stay on' because of the ubiquity of it. Snap is not Facebook. It's very possible that 'parents' never go onto snap, because it offers them little outside of messaging. 'Sharing moments' is just not what people > 30 care to do that much. Maybe some, but not likely a critical mass. Furthermore - even these features are somewhat faddish among the young. There is a very real possibility that Snap is a huge fad, with very little underlying utility. Now - Snap is different. They refer to themselves as a 'camera company' so maybe they can keep innovating, but I'm doubtful. But if they position themselves as an 'aspirational youth brand' - then they might stay relevant. Think: Nike, Lululemon - they make pretty good gear used by 'real atheletes/yoga types' - which gives the brand enough validation for you and I and other chumps to pay $$$ for their gear while we sweat it out. They are LA based, which is good for that. Also - those 'snap glasses' - even though they were not very 'useful' - actually were a brilliant bit of marketing, and hit the zeitgeist of relevance perfectly. So either/or: 1) They make an app that appeals to 'everyone' - which I doubt. 2) They continue to innovate in 'camera/sharing/experience' perpetually, which I doubt. 3) They can stay cool. Which I also doubt, but wouldn't put it pas them. Again the issue is also real valuation: $25 Billion is a lot of valuation for a company that's not making any money. I don't care what their 'growth' is. What matters is 'how big they can grow, how well they keep customers, and how well they convert on them'. I'm doubtful that Snap - as we see it today is going to grow into commodity usage. Twitter has I think a broader appeal - and look where they are. Facebook did not change that much from after their IPO - the product offer is largely the same. The same thing millenials used, their parents and grandparents used. I don't think Snap can say the same. They could be succesful, but there's a lot more risk in it than say, FB - and that risk should be reflected in the valuation.
  - 10y ago

empath75 10y ago

They didn't. The price went up because dumb money got their first chance to buy the hype and it went down because there is only so much dumb money to go around.

jasonlingx 10y ago

How the market works is the only people whose opinions matter are those who put their money where their mouth is.

iaw 10y ago

Did you read about the lawsuit against Michael Dell after taking Dell private? Essentially he was sued because there was a price differential between the PE firms bid and the "true" market value of Dell, both of which were drastically above Dell's stock price. Valuations of companies are complex irrational things.

weavie 10y ago

I'm not convinced it is just the analysts that change the company valuation. When the price goes down, the media looks to attribute a reason to it. They see the analysts said sell and say that must be the cause. The reality is often a lot more complex.