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Snap Chat IPO

Snap Chat is going public finally! read this:

http://www.cnbc.com/2017/01/30/snap-to-choose-nyse-for-ipo-source.html

Any inputs?

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Snap Chat Premium is apparently the latest/greatest cam girl service. Other than the ever-expanding porn market, I don’t see SC having many opportunities for growth in the streaming message market. I’ll grab a few shares in the IPO and watch try to sell at a high point in less than a year.

Don’t take me too seriously, I don’t really know what I’m doing.

RIP bchad - the long-winded peacemaker of AF

Snapchat reminds me of twitter. It’ll probably do well for the first month or two and then just go downhill from there…

whats snaps moat?

"You want a quote? Haven’t I written enough already???"

RIP

Beautiful surprise!! I remember 5 years ago when Facebook went public I bought some shares and turned out to be a good call. I personally never had a Facebook account or Snap Chat but I can`t neglect their popularity and obviously the more users they have the more money is generated to the shareholders. I hope I`m not committing a hindsight bias when I expect SC to at least double up in the second year after the initial public offering. All my friends use Snap Chat on the regular and its not hard to see that it became a big part of their lives I even asked a couple of them and they all said SC has been going insanely huge. So I`m trusting my friends on this one and of course due diligence from my end is necessary. 

M. EM.

I like your way of coming up to a pre conclusion but what if the stock dips 50% below IPO what will you do to your friends? Haha

I`ll take` em all out for dinner and dedicate them “Blame it on me” by Akon minus the 14 year old girl story… LOL

M. EM.

LMFAO I knew you were about to throw a good joke I remembered you from last thread you are f****in halarious man… I need friends like you hahaha you know what I’m all in on Snap let the fun begin I love taking decisions after a good joke yes

edwardram wrote:

LMFAO I knew you were about to throw a good joke I remembered you from last thread you are f****in halarious man… I need friends like you hahaha you know what I’m all in on Snap let the fun begin I love taking decisions after a good joke yes

I know you remember this one too:

You miss 100of the shots you don’t take.” - Wayne Gretzky

wink

M. EM.

100% with you all the way 

who are these guys? trolls don’t communicate with each other. it’s weird.

You call this trolling? Why don’t you give me a good piece of advice instead of wasting a post?

edward has informed me that he is not a troll. all’s right with the world.

FB is a good comparison for snapchat imo. saw this pretty good article a few months back. saw other articles that said 2016 actual ad spending far exceeded expectations. in any case. its still too early for me. estimates are too crazy along with multiples.

https://www.bloomberg.com/gadfly/articles/2016-10-07/snapchat-ipo-5-char...

​​​​​​​http://www.cnbc.com/2017/01/17/snapchat-advertising-spend-by-clients-hit...

I love my cheese. I got to have my cheddar.

edwardram wrote:

You call this trolling? Why don’t you give me a good piece of advice instead of wasting a post?

Get lost!!

Very good articles Neryblop! One of my colleges will send me some more information I will share with you as soon as I receive them 

Neryblop wrote:

FB is a good comparison for snapchat imo. saw this pretty good article a few months back. saw other articles that said 2016 actual ad spending far exceeded expectations. in any case. its still too early for me. estimates are too crazy along with multiples.

https://www.bloomberg.com/gadfly/articles/2016-10-07/snapchat-ipo-5-char...

http://www.cnbc.com/2017/01/17/snapchat-advertising-spend-by-clients-hit...

I dont buy the FB/SC comparison. Parents arent going to pick up snap chat, heck most people over 30 wont. Its a niche market and i see a lot more of twitter in this company than FB. Heck instagram is trying to eat their lunch and based on how Zuckerburg has done in the passed I wouldnt bet against them doing exactly that

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

Facebook was a profitable company that generated positive free cash flow when it IPO’d. Snap is totally different. It is wildly unprofitable (negative 110% adjusted EBITDA margins, which is obscene) and burns a ton of cash. I understand this is popular and a lot of the spending is to support growth. This Facebook stuff is just going to be pushed by iBankers to pump up the valuation. If you don’t care about the difference between black and red, cash burn and cash earn (i.e. stuff that matters to businesses), then go ahead and buy off on this. There is a real business here for sure, but I would feel stupid buying off on the valuation. There will be a lot of non-financial metrics used to justify this valuation b/c you sure as hell can’t get there on the financials.

"You want a quote? Haven’t I written enough already???"

RIP

I have been reading many articles in the past two days of FB SC comparison. It’s definitely worth a shot.

https://www.google.ca/amp/s/amp.theguardian.com/media/2017/feb/03/is-sna...

edwardram wrote:

I have been reading many articles in the past two days of FB SC comparison.

Maybe you could consider comparing their financials instead of reading articles? They filed an S-1. It is all there for you.

I think when we look back at this in a few years, a lot of suckers will have been taken for a ride. There’s a lot of tremendous companies in tech but the NASDAQ is (i) historically volatile and (ii) at an all-time high…and here we are with a major IPO for a company that bleeds cash at a ferocious pace and likely won’t be profitable for many years (if ever). People are justifying the valuation based on metrics you would never find in an academic textbook or CFA curriculum – that is about as good of a sign of a bubble as I can think of. Not to mention the common equity in this IPO will have no voting rights. 

I know people will say, “…but look at Facebook”. Facebook is a totally different. It was very profitable when it IPO’d and was a legitimate investment. There were actual cash flows generated that you could model out. I admit that I would have said the valuation was lofty at the time, but you actually had profits and cash flows to value. You’re so far from that with Snap that it is laughable. Snap may be as profitable in the future, but you have to discount those future profits/cash flows many years out in the future at a high discount rate to account for risk they never achieve those profits with their 26 year old CEO. Good luck.

Recomended reading regadring the Zero-Voting rights common stock: http://wolfstreet.com/2017/02/03/snap-ipo-not-just-toxic-financial-resul...

but i think you are missing the fact that snapchat barely has revenues right now and is growing it exponentially. they are expecting to more than double their revs for 2017 from 360m to 1b. this type of business has crazy margins and is scalable. Facebook went from $1.5b revs in 2010 to $27b in 2016 and margins went from 70+% to 85%+. i’m not bullish on snapchat just because it is too early for me, but it can justify its valuation very easily with their organic secular growth. Also when zuckerberg started fb in 2004, he was only 19. both of these are social media ad cos. so its the same business. one is just more video oriented than the other. also on a side note, even fb to me is too young and too expensive.

Tommy83 wrote:

edwardram wrote:

I have been reading many articles in the past two days of FB SC comparison.

Maybe you could consider comparing their financials instead of reading articles? They filed an S-1. It is all there for you.

I think when we look back at this in a few years, a lot of suckers will have been taken for a ride. There’s a lot of tremendous companies in tech but the NASDAQ is (i) historically volatile and (ii) at an all-time high…and here we are with a major IPO for a company that bleeds cash at a ferocious pace and likely won’t be profitable for many years (if ever). People are justifying the valuation based on metrics you would never find in an academic textbook or CFA curriculum – that is about as good of a sign of a bubble as I can think of. Not to mention the common equity in this IPO will have no voting rights. 

I know people will say, “…but look at Facebook”. Facebook is a totally different. It was very profitable when it IPO’d and was a legitimate investment. There were actual cash flows generated that you could model out. I admit that I would have said the valuation was lofty at the time, but you actually had profits and cash flows to value. You’re so far from that with Snap that it is laughable. Snap may be as profitable in the future, but you have to discount those future profits/cash flows many years out in the future at a high discount rate to account for risk they never achieve those profits with their 26 year old CEO. Good luck.

I love my cheese. I got to have my cheddar.

voting rights are a non-issue to retail stock holders. I bought the class C GOOG shares because its cheaper and its night light im buying enough to make a dent. The finance industry hates them because they want to be able to put some idiot BB IB guy or MBB schmuck who can ruin the company even though companies fair way better with their founders running the show. 

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

I honestly think the perfect time if you were ever to try and time an investment into one of these companies is to do so RIGHT before they have their first profitable quarter (easier said than done of course but I did it personally with Tesla back in 2013). Once they finally had a profitable quarter, stock went parabolic. Revenues are great but investors care about profit. Sounds so elementary after all the accounting and equity valuation metrics you can literally spend weeks, months, building models with but it is true. 

Although not applicable to Snapchat anytime soon, Robert Shiller at Yale said once in a lecture something that from a theoretical standpoint really resonated with me and that is “As investors, we invest in stock for dividends”. I believe this to be true from a fundamental view. 

Tommy83 wrote:

Facebook was a profitable company that generated positive free cash flow when it IPO’d. Snap is totally different. It is wildly unprofitable (negative 110% adjusted EBITDA margins, which is obscene) and burns a ton of cash. I understand this is popular and a lot of the spending is to support growth. This Facebook stuff is just going to be pushed by iBankers to pump up the valuation. If you don’t care about the difference between black and red, cash burn and cash earn (i.e. stuff that matters to businesses), then go ahead and buy off on this. There is a real business here for sure, but I would feel stupid buying off on the valuation. There will be a lot of non-financial metrics used to justify this valuation b/c you sure as hell can’t get there on the financials.

^^^THIS

Interesting analysis by Prof Damodaran- My snap story- Valuing snap ahead of its IPO

http://aswathdamodaran.blogspot.com/2017/02/a-snap-story-valuing-snap-ahead-of-its.html

10x oversubscribed…………

"You want a quote? Haven’t I written enough already???"

RIP

Another piece of **** that has a bunch of users but burns through a bunch of cash and will never be profitable.

Do not want. 

- Fran: You know, in Tibet, if they want something, do you know what they do? They give something away.
- Bernard: They do, do they? That must be why they're such a dominant global power.

anyone get a piece of the IPO?

"You want a quote? Haven’t I written enough already???"

RIP

Made a limit order of 100 @ $30, executed at $24 at open.

I’m hoping to ride the IPO euphoria and make a quick profit (will probably dump around $29-30).

Just having followed Twitter, Fitbit, Gopro, and Twilio, it seems like the “IPO Euphoria” premium is pretty high before people realize that the fundamentals don’t make any sense and start selling like crazy.