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NBCUniversal Sold $500M Stake in Snapchat
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- varshithr 7y agoMaybe they're little late to the party
- rvz 7y ago> Three years ago this month, as Snap Inc. went public, NBCUniversal announced that it had invested $500 million in the company. Not sure why you would invest in Snap at their IPO price at $17, given that they had no prospect of profitability or any signal of growth due to Instagram's aggressive copying strategy at the time. Compared to three years ago, $10 is a bargin, but no better than the $5 price in early 2019. Better wait for it to enter single digits.
- AznHisoka 7y agoOf course if they had known it would have fallen to $5, they would have waited. Anyone would have. But nobody has the fortune to invest with 20/20 hindsight
- vsareto 7y agoThey gambled on a profit-less company IPO and lost. I'd say there was some hindsight.
- goatherders 7y agoI'd like to see how many tech companies are showing a profit when they IPO. ALso, 500M is a lot of money but it's not THAT much money when you're running a multi-billion dollar company and responsible for delivering billions in revenue. To get those numbers you have to invest in things. NBC isn't sitting around wondering if they can eek out another million dollars of ad buys for the TODAY show this quarter.
- Retric 7y agoI think the major tech companies aka Apple, Google, Microsoft, or even Facebook and Oracle etc where all profitable at IPO. You might get a lot of unprofitable tech IPO’s, but they are less likely to last and thus grow.
- AznHisoka 7y agoGreat. I assume you shorted them at IPO and reaped a fortune. Otherwise, my point stands :)
- 8ytecoder 7y agoThere’s a huge difference between having the foresight to say this is risky and predicting it will crash to $5 in 372 days. One is prudent investing the other is gambling.
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- aussiegreenie 7y ago
- autokad 7y agoI would think it was part of the deal. They are probably backing away as comcast offers its own streaming service
- dillonmckay 7y agoI also think NBC/Universal’s investment in quibi may have something to do with this. There is some overlap between it and Snapchat for short-form media.
- macspoofing 7y ago>Not sure why you would invest in Snap at their IPO price at $17, given that they had no prospect of profitability That's typical of social media companies - get users first, and figure out the money later. And it makes sense. If you have a billion active users on your platform, you can always find ways to make money. >due to Instagram's aggressive copying strategy at the time. Everyone copies everyone in this space and always has.
- RobRivera 7y agoHindsight bias is 20/20 If they had perfect knowledge of the future...
- tus88 7y agoLots o people be liquidating assets right now...
- sixhobbits 7y agoI never understand the "Quietly" part in headlines like this. The fact that it's headline news is kind of self-refuting, and even without that, where do people usually shout about the positions that they're selling?
- grenoire 7y agoIt is quite a large sum of money and if there has been no official statement from the company which did the offloading, then it is said to be quietly.
- nolok 7y agoExcept $500M barely register for a company the size of NBCUniversal; it is not "quite a large sum of money" for them at all. Their yearly revenue are above 30 Billions.
- rolltiide 7y ago> Except $500M barely register for a company the size of NBCUniversal Since it was in Comcast's quarterly report, it was large enough to "register".
- adventured 7y agoThe quietly part makes it sound more scandalous or suggestive, which drives clicks to an otherwise boring story. The only time I see people shout about positions they're selling, is when they absolutely have to unload in a hurry, so they go max wide on the potential buyer attention campaign. Magic Leap's recent public humiliation / desperation, is an example of this in action.
- nolok 7y agoIt's part of the headline newsspeak bingo game. My personnal dislike is to "this SLAMS that". It's one of the many many reason why news sites lose value and identity, everything is instant, everything is a big news, everything is written in a way that shocks to get clics and views, and the actual information comes second place.
- Dirlewanger 7y agoI wonder how much they regret not selling to FB
- dillonmckay 7y agoNot sure I understand. The IPO of Snap raised $3.4 billion w a valuation of $24 billion. Evan Spiegel has (maybe not this month) a net worth of over $2 billion. Zuck was offering $3 billion.
- namdnay 7y agoWithout contradicting your general point, Spiegel’s bet worth is so illiquid (so solid? :) ) that I’m not sure what it really would be if he wanted to get cash out
- vxNsr 7y agoI'd guess that a lot of the offer was in SO. so also illiquid. Though FB stock is worth way more than Snap stock so he probably made the wrong choice, but who knows.
- likpok 7y agoFB is less illiquid than SNAP for Evan. If he sells 50% of his SNAP shares, people will get concerned about his investment in the business. A mid-level exec (or even high profile acquisition) selling a bunch of FB stock doesn’t affect the price much. But he probably likes running the company more than he’d like the extra money.
- dillonmckay 7y agoThat is the key, he still had cash and control of a platform. Very different situation for Jack Dorsey w/ Twitter.
- bognition 7y agoIn 2014 FB stock was $20/share. Now its closer to $200/share, so a $3B offer in 2014 roughly translates to a $30B valuation today. From the financial side it appears that Snap made the wrong choice.
- qxmat 7y agoLiquidity problems?
- aussiegreenie 7y agoWho was silly enough to buy it??