3 ms·

This may be a good time to buy Snap. I remember FB being worth $33B some time after going public.

by rokhayakebe 8y ago

adventured 8y ago
$294 million operating loss on $297 million in revenue for their latest quarter. Snap's operating picture is an accountant's nightmare. By the time Facebook was five years old, fiscal 2009, they generated a $229m profit on $777m in sales. They turned profitable in the second half of their fourth year. Why? Relative financial discipline. Snap has taken the opposite approach, wild financial irresponsibility (no doubt encouraged by the fairly bubbly funding environment they got to enjoy). By the time Facebook went public, they had been profitable for over three years. They generated a $1b profit on $3.7b in sales in 2011, the year prior to the IPO. The situation could hardly be any more different from Snap at IPO or today.
- bob_theslob646 8y ago
  While I agree with your statement, I think you are giving "financial discipline" way too much weight. As you probably know Facebook( Instagram) did copy " stories" from Snapchat. When your competitor effectively steals your secret sauce, what do you do? I believe that is why they went with their radical UI design change.( In order to retain users, which backfired) I am not justifying the cash burn that snap had, just saying that competitors definitely were a factor in them not being financial disciplined. Another major negative was from the get go with that their shares listed are non voting which was a major turn off to wall street which got them blackballed from being included in the SP500.(Has nothing to do with running a company or financial discipline, but definitely a negative when large institutions cannot invest in you because of strict bylaws.)
- sonnyblarney 8y ago
  Yeah I'm not sure it's an issue of 'discipline' rather than simple product fundamentals.

3 ms·

This may be a good time to buy Snap. I remember FB being worth $33B some time after going public.

by rokhayakebe 8y ago

This may be a good time to buy Snap. I remember FB being worth $33B some time after going public.

adventured 8y ago
$294 million operating loss on $297 million in revenue for their latest quarter. Snap's operating picture is an accountant's nightmare. By the time Facebook was five years old, fiscal 2009, they generated a $229m profit on $777m in sales. They turned profitable in the second half of their fourth year. Why? Relative financial discipline. Snap has taken the opposite approach, wild financial irresponsibility (no doubt encouraged by the fairly bubbly funding environment they got to enjoy). By the time Facebook went public, they had been profitable for over three years. They generated a $1b profit on $3.7b in sales in 2011, the year prior to the IPO. The situation could hardly be any more different from Snap at IPO or today.
- bob_theslob646 8y ago
  While I agree with your statement, I think you are giving "financial discipline" way too much weight. As you probably know Facebook( Instagram) did copy " stories" from Snapchat. When your competitor effectively steals your secret sauce, what do you do? I believe that is why they went with their radical UI design change.( In order to retain users, which backfired) I am not justifying the cash burn that snap had, just saying that competitors definitely were a factor in them not being financial disciplined. Another major negative was from the get go with that their shares listed are non voting which was a major turn off to wall street which got them blackballed from being included in the SP500.(Has nothing to do with running a company or financial discipline, but definitely a negative when large institutions cannot invest in you because of strict bylaws.)
- sonnyblarney 8y ago
  Yeah I'm not sure it's an issue of 'discipline' rather than simple product fundamentals.