5 ms·

A loss of $3.45 Billion for the year - that is absolutely mind blowing. That is a net loss of USD $393,000 per hour for every hour of 2017.

acchow 9y ago
Eh, it was all booked in 2017. But almost $2 billion of this loss actually accrued over many years as stock options compensation.
- prklmn 9y ago
  Hello 1999!
  - adventured 9y ago
    No, in 1999 most public tech companies didn't account for stock options in that way. They pretended they weren't an expense, boosting their profitability figures. Although the dotcom bubble arguably played a big role in finally causing a shift in that accounting practice. https://hbr.org/2003/03/for-the-last-time-stock-options-are-an-expense https://hbr.org/2003/03/for-the-last-time-stock-options-are-...
deleted 9y ago
[deleted]
non_sequitur 9y ago
Like other people have mentioned, this is mainly stock compensation related, but the funniest part is that they tag this loss % as "Not meaningful" in their financial statements. Just a not meaningful $2B loss :)
- charlesdm 9y ago
  To be fair, it's a pure accounting loss, not an actual loss (of money in the bank) for the business. So in that respect it doesn't seem unreasonable to do.
lev99 9y ago
Companies don't die when they lose money. They cut expenses or they get acquired. Companies die when they have no revenue. If I were an investor in Snap I would much rather see them raise revenue then cut expenses or decrease loses. Their loses are considered in the stock price.
- jgalt212 9y ago
  It's clearly not that simple. Barring an absolutely horrendous product, one can almost always purchase $100 of revenue for $105.
  - lev99 9y ago
    5% might be a little low, but you do make a valid point that you cannot make a business selling at a loss.
deleted 9y ago
[deleted]
CobrastanJorji 9y ago
Put another way, this is roughly the cost of walking through a town at 0.1 MPH, destroying every house you come across.
- nerfhammer 9y ago
  you don't destroy the house, you transfer it from investors to employees, largely executives. reason is, the "loss" isn't cash outflow, it's from compensation by creating stock, which investors pay for via dilution.
  - CobrastanJorji 9y ago
    I'm not suggesting the wealth actually is being destroyed in this case. It's a mental heuristic for comprehending large amounts. A billion dollars isn't an amount of wealth that has any real meaning to my brain compared to things that happen in my life. On the other hand, I have a very real and personal understanding of about how much a house is worth. From that, it's reasonable to get a gut understanding of an amount of cost by imagining houses being destroyed at a certain pace.
- abraae 9y ago
  I visualise $1b as about the cost of building a shiny new casino in Vegas, or a large cruise ship. I like these comparisons because I can see them, and marvel at the sheer bigness of them.
leoharsha2 9y ago
Those losses are very common during the IPO year. Snap acquired a couple of startups using that money. Snap is the only innovative social media website right now. Let's see how they do in future

acchow 9y ago

Eh, it was all booked in 2017. But almost $2 billion of this loss actually accrued over many years as stock options compensation.

prklmn 9y ago
Hello 1999!
- adventured 9y ago
  No, in 1999 most public tech companies didn't account for stock options in that way. They pretended they weren't an expense, boosting their profitability figures. Although the dotcom bubble arguably played a big role in finally causing a shift in that accounting practice. https://hbr.org/2003/03/for-the-last-time-stock-options-are-an-expense https://hbr.org/2003/03/for-the-last-time-stock-options-are-...

deleted 9y ago

[deleted]

non_sequitur 9y ago

Like other people have mentioned, this is mainly stock compensation related, but the funniest part is that they tag this loss % as "Not meaningful" in their financial statements. Just a not meaningful $2B loss :)

charlesdm 9y ago
To be fair, it's a pure accounting loss, not an actual loss (of money in the bank) for the business. So in that respect it doesn't seem unreasonable to do.

lev99 9y ago

Companies don't die when they lose money. They cut expenses or they get acquired. Companies die when they have no revenue. If I were an investor in Snap I would much rather see them raise revenue then cut expenses or decrease loses. Their loses are considered in the stock price.

jgalt212 9y ago
It's clearly not that simple. Barring an absolutely horrendous product, one can almost always purchase $100 of revenue for $105.
- lev99 9y ago
  5% might be a little low, but you do make a valid point that you cannot make a business selling at a loss.

deleted 9y ago

[deleted]

CobrastanJorji 9y ago

Put another way, this is roughly the cost of walking through a town at 0.1 MPH, destroying every house you come across.

nerfhammer 9y ago
you don't destroy the house, you transfer it from investors to employees, largely executives. reason is, the "loss" isn't cash outflow, it's from compensation by creating stock, which investors pay for via dilution.
- CobrastanJorji 9y ago
  I'm not suggesting the wealth actually is being destroyed in this case. It's a mental heuristic for comprehending large amounts. A billion dollars isn't an amount of wealth that has any real meaning to my brain compared to things that happen in my life. On the other hand, I have a very real and personal understanding of about how much a house is worth. From that, it's reasonable to get a gut understanding of an amount of cost by imagining houses being destroyed at a certain pace.
abraae 9y ago
I visualise $1b as about the cost of building a shiny new casino in Vegas, or a large cruise ship. I like these comparisons because I can see them, and marvel at the sheer bigness of them.

leoharsha2 9y ago

Those losses are very common during the IPO year. Snap acquired a couple of startups using that money. Snap is the only innovative social media website right now. Let's see how they do in future