Snap IPO Opens At $24 - Almost Three Times The Size Of Twitter

Tyler Durden's picture

Having priced at $17, Snap Inc. opened for trading at $24, valuing the company over $34 billion - almost three times the size of Twitter, bigger than both HP and CBS, and almost as big as Ebay.

41% jump at the open from the IPO price and extending gains to $25..

Losses greater than revenues make for "hard math to work with" for investors, George Maris, portfolio manager at Janus Capital, says on Bloomberg Television.

At this valuation, Snap is almost three times the size of Twitter ($11.5bn)

 

Snap sold 200 million shares at $17 each for $3.4 billion, above the initial range of $14 to $16. It was oversubscribed by ten times, according to sources.

As The FT reports, John Colley, a professor at Warwick Business School, said the company faces significant challenges competing with Facebook and Google, makes substantial losses and is suffering from slowing growth. 

“Snap Inc is benefiting from institutions and individuals being awash with cash,” he said. “The top end valuation reflects high liquidity rather than a great prospect. There is far more cash than opportunities, which means pursuit of long odds risky options such as Snapchat.”

As a reminder for those who are buying SNAP with both hands and feet...

The company reported revenue of $404.5 million in 2016 and a loss of $514.6 million for 2016, compared with revenue of $57.7 million and a loss of $372.9 million a year earlier.

 

Snap said it had 158 million daily active users on average in the quarter ended in December, a 48% increase from the same quarter a year before.

If only the company had lost more money!!

Snapchat is expert at burning cash. Free cash flow was $678 million last year. THAT IS MORE THAN ITS REVENUE for the year.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
NO_MAN's picture

In November 2016, a vast system of agitation and propaganda was set up in order to destroy the reputation and the authority of President Donald Trump as soon as he arrived in the White House. It is the first time that such a campaign has been scientifically organised against a President of the United States, and with such resources. Yes, we are indeed entering a post-Truth age, but the distribution of rôles is not what you may think it is....

 

The Clinton system to discredit Donald Trump by Thierry Meyssan http://www.voltairenet.org/article195455.html

Bunker Boy's picture

There's a sucker born every minute.

hedgeless_horseman's picture

 

I tried to calculate the P/E but I keep getting some weird #DIV/0!  error.

The_Juggernaut's picture

Nothing dies faster than a fad.  You'd better get in if you don't want to miss the implosion.

froze25's picture

Trading at 24.50 now, I must admit my Wife, her sister and their girl friends use Snap Chat all the time. Women love that app, and that shouldn't be over looked.

DetectiveStern's picture

Lots of people breath air but it doesnt mean there's a profit to be made.

froze25's picture

Yeah but they own a proprietary means that people seem to enjoy of a way of breathing that air. They also have the ability of slipping in adverts into the videos that are sent. Are they over valued, I don't know but their value isn't zero.

Jim Sampson's picture

Wait...  I've seen this before!

SamAdams's picture

I'm guessing this IPO was underwritten by some GS Jews and sold to snowflakes.  Is 200 million the total outstanding shares?  Will make a nice reverse split when the time comes. 

JuliaS's picture

A foodstamp program IPO would've made just as much sense.

scrappy's picture

Wait...  I've seen this before! No kidding.

Tulip Bubble, Dot Com Craze, Real Estate. etc. etc. It's called "Speculation"

OK, I look at that list and see some companies that make things of value, and I see advertising based "apps" and data thieves.

Google

http://yacy.net/en/index.html

Free P2P Web Search by the people, for the people

Facebook

Friendica, - YOU Control the Data

Free P2P and it can talk with other "big guy" networks.

http://friendica.com/

Or this one

Retroshare

secure communication for everyone

http://retroshare.net/

Connect with Friends and Family

Retroshare creates encrypted connections to your friends. Nobody can spy on you. Retroshare is completely decentralized. This means there are no central servers. It is entirely Open-Source and free. There are no costs, no ads and no Terms of Service.

Chat

Send text and images. Discuss with various people in chat rooms. Express your emotions with the rich smiley set. Use distant chat to securely chat with friends-of-friends.

Voice and Video

Make free and secure calls with the VoIP plugin. Catch up face to face with a video call.

Mail

Send encrypted messages to other members of the network. Retroshare can store encrypted messages on friends nodes to deliver messages while you're offline.

File sharing

Share files with your friends or with the whole network. Use the search to find files. Retroshare uses swarming similar to BitTorrent, to accelerate the download. This makes it possible to share big files with 1GB or more. Your privacy is protected with anonymous tunnels. Only your direct friends might learn which files you download.

Forums

You can read and write forum posts offline. This is perfect while you're on the go. When you have an Internet connection, Retroshare will automatically sync forums with your friends. Decentralized forums are censorship resistant by design.

Posted

Share your favorite links. See which links others like. Vote and discuss links.

Channels

Publish files in channels. Subscribe to channels and automatically download the latest files. Comment on files and spread them to your friends.

Protect your IP with Tor/I2P

Need to hide from Internet surveillance? Can't connect to your friends because of censorship? Need to bypass nasty firewalls? Use Retroshare over Tor to hide the connection between you and your friends.

Or this one...

https://sandstorm.io/

Twitter

twister

http://twister.net.co/

Free Peer-to-peer microblogging- YOU Control the Data

twister is the fully decentralized P2P microblogging platform leveraging from the free software implementations of Bitcoin and BitTorrent protocols.

These Unicorns whos business model is cheating, data thievery, dangerous privacy violations and censorship - their days are numbered.

People are waking up to the Tyranny.

froze25's picture

Every thing you said is 100% true. The issue is that most people will not adopt those solutions, not because the don't work but simply they don't get it and don't care. Yet. Also most alternatives do take some Tech knowledge to get them setup initially and lets face it, beyond using a simple graphical user interfaces most people, women in particular are not tech savvy or even that tech literate. If you have to do one thing to a firewall like a simple port forward (not saying your suggestions require that) you have just eliminated about 99% of the population.

pods's picture

Not yet it isn't. 

Of course, Myspace isn't a zero quite yet I don't think. 

This is going to be the top. A 34 billion company that makes people have funny faces on their phone and allows you to send dick pics?

Whew, that is amazing!  

This is going to be the blowoff top. Mark my words.

pods

CJgipper's picture

And you already have competitors.  I use regular text for my dick pics because I don't send them unless I'm proud of them.

hedgeless_horseman's picture

 

I use regular text for my dick pics because I don't send them unless I'm proud of them.

How is the divorce from Huma going?

froze25's picture

I had lunch with the wife. While eating I asked her what she thought of it and why she liked it.

She told me that it was easy to use, she told me she liked that auto deleted the vids after you watched them and if you didn't watch them in 24 hrs they were deleted. She also said that she really like all the "filters" they provided. She said some were funny and some "make you look great" with a simple click of the button.

Now what I see is the ability to closely watch and track trends in what women are talking about. Think about this, you take the audio, use a speech to text software on the backend servers to translate all the audio to text and load that text into a data base and then by running automated search queries you can see if there is up ticks on certain word use. With that you can see what is currently being discussed and then use that information to determine what is selling, what are topics of interest. All the data you would need to predict quarterly earnings trends and other useful information. Ad revenue is, in my opinion small potatoes compared to the value of all the "big data" that is collected and potentially mined and sold.

813kml's picture

They squeezed the IPO in right before crapchat gets implicated in pizzagate.

froze25's picture

You think? What info do you have?

MK13's picture

It's not the top. It will run up until smart money can take $ off the top (few weeks), and then it will be allowed to sink when its employees can dispose of their share holdings (typically one year). It will have nice trading moves in between.

Joe Sichs Pach's picture

Have to agree with you pods.
First thing I thought was this is the sign for peak insanity. There may be a click or two up, but this cannot be sustained.

DetectiveStern's picture

But there are many other apps that do the same thing. Their big USP is that the images last a few seconds but that can be beaten by a screen grab.

App users are fickle if they try to monetise to much people will love to something else. Seeing as the app was designed by one bloke in his bedroom there isn't exactly a huge barrier to entry either.

froze25's picture

I really think the money for them is in the information they gather. Sure the video deletes for you, but I bet they keep everything.

CNONC's picture

The question is the value of that advertising.  I suspect that it is near zero.  Advertising is becoming background noise, unnoticed and ineffective in all venues. 

Giant Meteor's picture

Yes this is true. But it has a higher, nobler purpose. Cash burn to the cash burn ..

The unreal, of the real things is, profitable, which sure, at first glance appears to be madness unchained. But as always, a few folks are going to become fabulously wealthy, with no real product, profitability, and minimal effort ..

Here today, gonorrhea tomorrow.

So It Goes's picture

Tulips weren't zero value either.

Jäger's picture

you should probably get a divorce

froze25's picture

I guess you haven't been married or spent much time with women.

The Saint's picture

That crap will drive you nuts if you are not very careful to recuse yourself.

 

froze25's picture

I garden, have animals and build shit. Those are the things that balance me.

Bluecoffeecup's picture

Adolescents use it all the time. They prefer it to facebook messenger and other socials.

Giant Meteor's picture

And another excellent point. The fate of the nation hangs in the balance of adolescents, engaging in adolescence.

11 When I was a child, I spake as a child, I understood as a child, I thought as a child: but when I became a man, I put away childish things.

1 Corinthians 13:11King James Version (KJV)

Now before ya go there, I have been known to fall short on this perfect spiritual ideal myself on occasion ;)

 

Joe Sichs Pach's picture

So it's like Teddy Ruxspin or Cabbage Patch dolls?
This will end well

BennyBoy's picture

 

 "The Live Stories section is a curated collection of snaps, submitted by users or brands at a specific event edited together by the Snapchat staff. "

FY 2017 37.8% of revs.

Nobody, not your wife, her sister and their girl friends, nor you give a shit about brands or staff fucking curated  stories. Slow death spiral for "Live Stories" coming.

 

There is a way for snap to grow ad revs but they haven't figured it out yet. They want to grow like FB but are acting like another twitter.

manofthenorth's picture

You have probably forgotten to multiply by the tinkerbell factor.

The economy of illusion, the greatest export of the empire of illusion.

SNAFU

SSDD until it is not.

VD's picture

sadly, twitter is the most useful soical media platform and is priced as the least useful, while snap is literally the most useless......

Joe Sichs Pach's picture

THe problem with any of these platforms is I don't give a shit what the people who use them have to say. Nobody needs to hear the constant opinions of millions of people incessantly. It's also not a platform I prefer to consume news from. I don't think I'm alone.

Bunker Boy's picture

There's a sucker born every minute.

BorisTheBlade's picture

Underwriting unicorns is a hell of a racket.

hound dog vigilante's picture

 

SNAP is a JOKE.

 

Still waiting for any/one of these socail media co.'s to earn money (net profit).

 

Whenever these social media co''s introduce advertising/user fees, their customers walk away... so how are SNAP/TWIT/FB even considered viable businesses?

 

Bunker Boy's picture

There's a sucker born every minute.

ejmoosa's picture

And sometimes three suckers in a minute when needed...

Giant Meteor's picture

Just a curious type question, but why exactly did you appreciate Chelsea Clinton? I also noticed your bio, is a Dr. Seuss rhyme.

Can you expound further? I will stipulate in advance, I'm probably going to regret asking ..

Thanks!

ejmoosa's picture

In this market we need at least three suckers per minute, and maybe four or five...

Darktarra's picture

And yet we have another multi-billion dollar company that produces absolutely [NOTHING]!!!