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> Snapchat, the photo-messaging app raising cash at a $15 billion valuation, probably isn't actually worth more than Clorox or Campbell Soup. Why not? Edit: O

> Snapchat, the photo-messaging app raising cash at a $15 billion valuation, probably isn't actually worth more than Clorox or Campbell Soup. Why not? Edit: Okay, personally and intuitively, I'd value a convenient means of communication more than processed food and snacks.

josefresco 12y ago
"investors agree to grant higher valuations, which help the companies with recruitment and building credibility, in exchange for guarantees that they'll get their money back first if the company goes public or sells" That's all she wrote- unless of course your startup actually sells something, than you might have a bottom number that still looks impressive once the initial investors have moved on.
wavefunction 12y ago
Some are these are companies with products that produce profits and the other is a photo-sharing app that doesn't.
balls2you 12y ago
when internet is down, snapchat will not work but clorox and campbell soup will still continue to do their job. that's why :)
- x3c 12y ago
  Same goes for Google.
- Chichikov 12y ago
  The internet will never be down again (barring the Apocalypse). Human life changed in the nineties in ways that we have not even begun to grasp.
  - balls2you 12y ago
    tell that to users of Comcast
- balls2you 12y ago
  haha, downvoted due to lack of a sense of humor in the crowd.
pkaye 12y ago
You too can invest in my $1 million company for investing just $1000 to buy 0.001 shares.
bko 12y ago
Probably because Clorox and Campbell pull in ~$5 billion and ~$8 billion in revenue and have done so for the last 5 years. Pretax earning for both are ~$1 billion. I agree that future cash flows are more important than historical performance but a track record counts for something, right?
- nqureshi 12y ago
  Would you rather invest in Campbell soup or Snapchat?
  - bko 12y ago
    Clorox stock price 5 years ago: ~65 Clorox stock price today: ~108 Annual return: 10.7% Campbell stock price 5 years ago: ~35 Campbell stock price today: ~45 Annual return: 5.15% I get it, soup isn't sexy. Doesn't mean its not a good investment. Personally, I don't claim to have a preference for one or the other. Investment is more about risk profile than blind speculation.
    - adventured 12y ago
      Clorox is also paying a 2.7% dividend. Campbell is 2.8%. Would be reasonable to bump those five year annual returns up to perhaps ~13% and ~7.5% (let's assume the dividend was lower five years ago).
  - discardorama 12y ago
    Chlorox is the slow-and-steady type. SnapChat is the hare, to Chlorox's tortoise. The chances that Chlorox or Campbell will still be around in 10 years? Very high. Snapchat? Not so much.
  - tortilla 12y ago
    I would invest in Campbell soup all day long. And I would gamble on Snapchat.
  - l33tfr4gg3r 12y ago
    On the other hand, I personally think the chances that Snapchat (or its technology) will be acquired down the road are a lot higher than either Campbell or Chlorox.
venomsnake 12y ago
I can clone Snapchat in a weekend. So can couple of million other people. It's fall could be as rapid as its rise. I cannot even begin to grasp the challenges of delivering canned soup around five continents. Campbell solve hard problem. Snapchat - easy one.
- kowdermeister 12y ago
  It's amusing to see that you think that to compete with SC is as simple as copying its functionality.
  - brohee 12y ago
    It sill makes the idea that someone would pay billions (in cash) for Snapchat technology pretty funny. As how to value their users...
  - phatfish 12y ago
    It's not that it's easy, it's the barrier to entry. One person can build a potential SnapChat clone (or next big thing that ends up being hip), and have access to the same potential user/customer base. I can sell home made soup on my front lawn, but i sure as hell can't scale to Campbells size overnight. This is why Campbells is the safe investment.
- megaman821 12y ago
  Because Snapchat's valuation is solely based on their technology? Snapchat had the right product with the right marketing that lead them to gaining a large user base with high engagement. Furthermore, is Campbell's valuation based on their soup recipe? I can make chicken soup in hour. They are valuable for their brand, distribution, and production capabilities.
  - venomsnake 12y ago
    Snapchat success came by fraud. They lied their audience about the self destruction of their messages.
  - 12y ago

josefresco 12y ago

"investors agree to grant higher valuations, which help the companies with recruitment and building credibility, in exchange for guarantees that they'll get their money back first if the company goes public or sells" That's all she wrote- unless of course your startup actually sells something, than you might have a bottom number that still looks impressive once the initial investors have moved on.

wavefunction 12y ago

Some are these are companies with products that produce profits and the other is a photo-sharing app that doesn't.

balls2you 12y ago

when internet is down, snapchat will not work but clorox and campbell soup will still continue to do their job. that's why :)

x3c 12y ago
Same goes for Google.
Chichikov 12y ago
The internet will never be down again (barring the Apocalypse). Human life changed in the nineties in ways that we have not even begun to grasp.
- balls2you 12y ago
  tell that to users of Comcast
balls2you 12y ago
haha, downvoted due to lack of a sense of humor in the crowd.

pkaye 12y ago

You too can invest in my $1 million company for investing just $1000 to buy 0.001 shares.

bko 12y ago

Probably because Clorox and Campbell pull in ~$5 billion and ~$8 billion in revenue and have done so for the last 5 years. Pretax earning for both are ~$1 billion. I agree that future cash flows are more important than historical performance but a track record counts for something, right?

nqureshi 12y ago
Would you rather invest in Campbell soup or Snapchat?
- bko 12y ago
  Clorox stock price 5 years ago: ~65 Clorox stock price today: ~108 Annual return: 10.7% Campbell stock price 5 years ago: ~35 Campbell stock price today: ~45 Annual return: 5.15% I get it, soup isn't sexy. Doesn't mean its not a good investment. Personally, I don't claim to have a preference for one or the other. Investment is more about risk profile than blind speculation.
  - adventured 12y ago
    Clorox is also paying a 2.7% dividend. Campbell is 2.8%. Would be reasonable to bump those five year annual returns up to perhaps ~13% and ~7.5% (let's assume the dividend was lower five years ago).
- discardorama 12y ago
  Chlorox is the slow-and-steady type. SnapChat is the hare, to Chlorox's tortoise. The chances that Chlorox or Campbell will still be around in 10 years? Very high. Snapchat? Not so much.
- tortilla 12y ago
  I would invest in Campbell soup all day long. And I would gamble on Snapchat.
- l33tfr4gg3r 12y ago
  On the other hand, I personally think the chances that Snapchat (or its technology) will be acquired down the road are a lot higher than either Campbell or Chlorox.

venomsnake 12y ago

I can clone Snapchat in a weekend. So can couple of million other people. It's fall could be as rapid as its rise. I cannot even begin to grasp the challenges of delivering canned soup around five continents. Campbell solve hard problem. Snapchat - easy one.

kowdermeister 12y ago
It's amusing to see that you think that to compete with SC is as simple as copying its functionality.
- brohee 12y ago
  It sill makes the idea that someone would pay billions (in cash) for Snapchat technology pretty funny. As how to value their users...
- phatfish 12y ago
  It's not that it's easy, it's the barrier to entry. One person can build a potential SnapChat clone (or next big thing that ends up being hip), and have access to the same potential user/customer base. I can sell home made soup on my front lawn, but i sure as hell can't scale to Campbells size overnight. This is why Campbells is the safe investment.
megaman821 12y ago
Because Snapchat's valuation is solely based on their technology? Snapchat had the right product with the right marketing that lead them to gaining a large user base with high engagement. Furthermore, is Campbell's valuation based on their soup recipe? I can make chicken soup in hour. They are valuable for their brand, distribution, and production capabilities.
- venomsnake 12y ago
  Snapchat success came by fraud. They lied their audience about the self destruction of their messages.
- 12y ago