Over the past years(as a new grad) I thought that I would've killed to work at Snapchat, Fitbit, Uber, or Twitter. Now, I wouldn't touch any of those companies with a 50 foot pole. I've grown extremely cynical about startups and the extreme hype that surrounds them.<p>That being said, at Internapalooza this year, the longest line there was for SnapChat and every young person seemed enamored with them. And I remember a time where everyone was screaming that Facebook would fail because of it's lack of profit or that Twitter was the next Facebook/Google.<p>This is all a long way of saying that no one knows what the hell they are talking about when they discuss these companies. Whether that's posters on HN, financial talking heads, or even successful people in Silicon Valley. If you have some advantage on the market, and can predict the correct valuation of Snapchat, then:<p>1. Put your money where your mouth is. Buy or short the IPO.<p>2. It's probably wise to not share your take as it relinquishes the advantage you think you have on the market.<p>3. Hope you stay solvent longer than the market stays irrational.<p>Just remember, these same "experts" said that no one needed DropBox when they had wGet.
People are asking if Snap is more Twitter or Facebook. From my (light) exposure, it doesn't seem like either. It's more like a lifestyle-aware replacement for Apple Messages + Camera -- two of the most heavily used apps on any phone. (For Android, replace Apple Messages with whatever Google calls their text chat app this week.)<p>The closest comparison could be WhatsApp, and that was valued at $19 billion. So I'm not sure that Snap's valuation is as outrageous as it seems based on traditional metrics.<p>Also, I've been really impressed by the design of the Spectacles. The yellow charging case is a brilliant way to make the glasses lighter. Snap is the only major tech company that understands anything about playful design -- Apple, Google, Facebook and Microsoft are all treading the same safe paths of post-Jobsian blandness.
If you have a large amount of money you don't mind gambling with and can afford to stay solvent longer than the market can stay irrational, I feel like this is the best short ever.<p>My 5 year target on SNAP would be roughly one can of Pringles.
When the next market meltdown happens, Michael Lewis will write a great book about people buying non-voting shares of a fad company at a $24b valuation that says in its prospectus that it has no plans to make money and maybe never will.<p>Or I'm wrong and they won't be a fad and will figure out how to monetize, but I feel like the multiplied probabilities of both make it as clear a bet as you ever get.
They are pricing right at the top of their range with this if the rumors are true. I don't think they are announcing hte actual price until after the close.<p>One one hand raising as much as possible is very nice for the company but to temper that sentiment I think it was Robin Li, the Baidu founder, who made the comment that while he was very happy with the first day pop his stock had, it was an actual curse.<p>he was prepared to run an XX Billion dollar business and hit his targets but with the opening day pop he was now running a 2X Billion dollar business and that made things significantly harder than if the stock had risen gently over the course of 4-8 quarters.<p>I wish the Snap team well, but they'll have a few hiccups coming.<p>They've been private long enough that a deluge of shares will come free trading this year and they'll at some point have to do the tight rope walk of switching from telling wall street to look at user growth to looking at profits.<p>If you want to invest I'll quote someone sitting beside me. "The problem with Snap is determining if they are more Twitter or Facebook."<p>From a wall street perspective this IPO was a bit different. It was about 10x oversubscribed, which is alot but not uncommon. What was interesting was that alot of mutual funds got almost full allocations and hedge funds were shut out compared to what they would normally get.<p>Maybe this is a good thing?
Anyone knows their growth numbers since the introduction of Instagram Stories? For influencers with a following in the 18+ age range this was the day a lot quit Snapchat (including myself).
> "$59 million in revenue in 2015 to nearly $400 million in 2016"<p>Valuation at 60x 2016 revenue with no profit? Oh boy.<p>Aside from that, who uses Snapchat?
I don't use Snap products, but from my totally uninformed, unengaged vantage point it seems to me that Snap is valuable because they present a different set of values to their users then Facebook, Google, etc.<p>Their first product wanted to challenge the permanence of our digital stuff. (Forget the underlying technology.)<p>The glasses are about challenging this kind of Google/Apple model of the person as some elegant cyborg from the Jetsons. They offered a toy for, like, just goofing off.<p>I imagine users like it because it's not crammed with ads and spam yet.<p>$24B is about half of what it costs to build high speed rail from LA to SF, or a third of what it might cost for a manned mission to Mars.<p>Compared to what it probably costs to operate and develop, $24B sounds redonkulous. Compared to those other projects, it's hard to see what Snap has that's so rare.<p>Maybe the better comparisons are Nike (market cap $95B) and Coca-Cola ($182B). Snap is using near-commodity economic inputs and outputs to express a point of view and build a brand.<p>All of this is speculation from my deep crater of ignorance.
Somehow I've managed to see exactly zero comments about Whatsapp stories in this thread, which really surprises me. I think that's a hell of a lot more scary to Snapchat than Instagram stories. Most people with Instagram have Snapchat, but most people with Whatsapp do not have Snapchat.<p>For those who don't know (and I don't know much) Whatsapp just launched a stories feature, similar to Instagram or Snapchat.
What I find really interesting in that number is that according to Matt Levine the IPO has been already oversubscribed 10 times.[0]<p>This kind of number strongly implies that one can expect the immediate post-IPO valuation to be quite a bit higher. However, once the aggressive stock flippers are done, there's no telling where the stock price finds its equilibrium.<p>0: <a href="https://www.bloomberg.com/view/articles/2017-03-01/snapchat-indexes-and-free-research" rel="nofollow">https://www.bloomberg.com/view/articles/2017-03-01/snapchat-...</a>
I don't see that snapchat has the lock-in to make it worth the risk. Sure you can leave other social networks and it's always a risk but Snapchat's ephemeral nature seems to make that risk much much worse. That said I only used it for a week before I got annoyed by it so maybe I don't have the best perspective.
What I don't understand about this is if I'm using Instagram Stories, just because I happen to be an active instagram user....why would I ever switch to Snapchat other than audience? I can get alot of the same audience on Instagram already. Stories does the trick mostly
People my age (22) just use Snapchat to flirt or post pictures of parties. No one - and I mean no one - ever checks out the articles in the Stories section of Snapchat. I really don't see any way for them to make money at this point.
Snapchat is Comcast for your face, without the need for pipes. They want to own the distribution of video content on mobile (and eventually AR), whether it comes from your friend or from NatGeo. Right now, it's hard to get started on Snapchat for small vendors. It makes a lot more sense for large companies. This differentiates its strategy from Google and Facebook in a big way -- it's more demand generation (which FB also serves) than end-of-pipeline marketing. I am not sure how this limitation affects its growth potential. Thoughts? Will they open it up to smaller clients? How will the limitations of the format affect ads?
I see 0 value in Snapchat. Besides, how is it even being monetized?<p>Edit: I meant 0 value as in 0 <i>added</i> value. See mrweasel's comment below for more details on the second point.