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SNAP - Snap Inc

Discussion in 'Stock Message Boards NYSE, NASDAQ, AMEX' started by stock1234, Feb 9, 2017.

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  1. stock1234

    stock1234 Well-Known Member

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    [​IMG]

    Snap Inc. operates as a camera company. It offers Snapchat, a camera application that helps people to communicate through short videos and images. The company also provides a suite of content tools for partners to build, edit, and publish snaps and attachments based on editorial content; and Spectacles, which are sunglasses that capture video from a human perspective. The company was formerly known as Snapchat, Inc. and changed its name to Snap Inc. in September 2016. Snap Inc. was founded in 2010 and is headquartered in Venice, California.
     
    #1 stock1234, Feb 9, 2017
    Last edited: Mar 2, 2017
  2. stock1234

    stock1234 Well-Known Member

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    Snap IPO: Six things we now know about Snapchat parent company

    At long last, the veil on Snapchat has been lifted.

    Snap Inc. SNAP, +0.00% , the parent company of messaging app Snapchat, officially filed to go public Thursday. Snap, which calls itself a “camera company,” said it plans to raise up to $3.2 billion Stockholders who buy into the offering will not have any voting rights.

    With its initial price range of $14 to $16 a share, Snap would have a public market capitalization between $19.5 billion and $22.2 billion. Snap’s latest private valuation was $17.8 billion, according to The Wall Street Journal.

    Snap reported that its ephemeral messaging service had 158 million daily active users at the end of 2016, and an average of 2.5 billion “snaps” are created on Snapchat every day.

    See also: Can IPO market Snap out of its doldrums in 2017?

    Snap plans to list on the New York Stock Exchange under the proposed symbol “SNAP.”

    Snapchat, an app in which users send and view “snaps,” makes money from ads on the platform and content created by third-party channels such as news organizations. It also recently introduced a hardware product, Snapchat Specs, and has a payment feature called Snapcash.

    Here are six things to know about the company before it goes public:

    The financials

    Snap reported growing revenues and increasing losses. Snap recorded $404.5 million in revenue in 2016, compared with $58.7 million in 2015. Net losses grew to $514.6 million in 2016, compared with a net loss of $372.9 million in 2015. Like many burgeoning tech startups, Snap warned that it “may never achieve or maintain profitability.”

    Snap recorded a loss from operations of $520.4 million in 2016 and a loss of $381.7 million in 2015. Its global average revenue per user for the three months ended in December 2016 was $1.06, up from 31 cents in the year-earlier period.

    The majority of Snap’s revenue in 2016, 98%, came from advertising.

    Read also: Seven highly valued tech startups that could IPO in 2017

    A young, active user base

    Snap had 158 million daily active users, which it says is a “critical measure” of user engagement, as of Dec. 31, 2016. Growth in daily active users has been pressured of late, though, growing by only 7% between the second and third quarters of 2016 and relatively flat growth in the final quarter. Snap mentioned competition in their prospectus, and that decline roughly coincides with Facebook Inc.’s FB, +0.14% early August launch of Instagram Stories, a product similar to one of SnapChat’s most popular features.

    User growth is important for attracting advertisers and, consequently, the majority of Snap’s revenue. The majority of Snapchat users are 18-to-34 years old, a coveted advertising demographic that the company has reportedly been luring away from sites like Facebook. Users younger than 25 are among the most active on Snapchat, visiting the app more than 20 times a day and spending more than 30 minutes a day, as of the quarter ended December 2016, Snap said.

    On average, daily active users visited Snapchat more than 18 times each day and spend 25 to 30 minutes there.

    Still, Snap noted that the teen demographic is not “brand loyal” and could shift attention to another platform. Already the numbers show a seasonality, with engagement lower in summer months, according to the prospectus. Also, Snap may struggle to grow its user numbers in countries or areas without the high-bandwidth-capacity cellular networks the app requires, it said.

    Retaining control

    The company has three classes of common stock and plans to offer common A stock that will not give stockholders any voting power.

    Owners of class B common stock will be entitled to one vote per share and holders of class C common stock, which include co-founders Evan Spiegel, 26, and Robert Murphy, 28, are entitled to 10 votes per share. With that ownership, both parties have “the ability to control the outcome of all matters” that are sent to the stockholders for approval. The filing does not yet disclose what percentage voting power they will have after the offering.

    See also: The IPO market is in the dumps, and all the tax cuts in the world won’t help

    Spiegel, the company’s chief executive, had a salary of $503,205 in 2016, with a $1 million bonus and other compensation totaling $2.4 million. Under his offer letter, he will reduce his salary to $1 as of the effective date of the registration statement, with a cash bonus of $1 million. He will also receive restricted stock units, representing 3% of outstanding capital stock, in quarterly installments for three years, beginning in the third quarter after the offering.

    If either are fired, they will still have “significant” voting power. If either die, shares will convert and the other co-founder will be able to exercise voting control over outstanding stock.

    Rivalries and a dependence on big companies

    Snap uses Alphabet Inc’s GOOGL, +0.32% GOOG, +0.43% Google Cloud for much of its computing, storage, bandwidth and other needs. To that end, on Jan. 30, 2017, just three days before the filing, Snap committed to spend $2 billion with Google Cloud over the next five years. If that relationship were disrupted, Snap said its business would be “seriously harmed.” Snap sees its hosting costs with Google or others growing as its user base and engagement grows.

    In terms of competition, Snap lists Apple Inc. AAPL, +0.72% Alphabet’s Google and Twitter Inc. TWTR, -1.20% Facebook may be a more direct threat, as Snap noted the new feature on Instagram that “largely mimics” its Snap Stories. These companies have greater resources and may have the ability to draw users away from Snap, the company admitted.

    “We face significant competition in almost every aspect of our business both domestically and internationally,” the prospectus said.

    Many buildings, but no headquarters

    Snap has been known for keeping things under wraps, even within the company. To that end, the prospectus says the company has offices spread out across the U.S. and abroad, including several principal offices in Venice, Calif.

    But those principal offices are still “dispersed throughout the city,” which Snap notes could hurt employee morale, retention and the company’s ability to oversee employees. The company had 1,859 employees at the end of 2016, up from 600 in 2015.

    Still, the prospectus says the company has a tightknit and “kind” team.

    “When we say ’kind,’ we mean the type of kindness that compels you to let someone know that they have something stuck in their teeth even though it’s a little awkward,” the prospectus says.

    Read also: Investors hope Snapchat will unlock IPO market for tech unicorns

    Moving past sexting

    Snapchat launched in 2011 as platform to quickly send selfies. Its key advantage was that the “snaps” disappeared after they were sent, so users felt “comfortable sending photos of themselves even when they don’t look pretty or perfect.”

    But the platform quickly developed a reputation for “sexting,” or sending racy selfies and videos.

    “When we were just getting started, many people didn’t understand what Snapchat was and said it was just for sexting, even when we knew it was being used for so much more,” the prospectus says.

    Moving on from selfies, Snap added videos and then the ability to send a photo or video to all of the user’s friends, thus launching “My Stories.” They added publisher stories in January 2015, opening up the feature to organizations with editorial teams.

    Since those days, Snap has added more features, including lenses that superimpose over the user’s face and geofilters, allowing an overlay for the user’s location and for brand advertising.

    Google shares were flat premarket Friday, but are up 10% in the last 12 months, while the S&P SPX, +0.60% as gained 19%.

    http://www.marketwatch.com/story/sn...know-about-snapchat-parent-company-2017-02-02
     
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  3. Gambit

    Gambit Active Member

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    $SNAP Whoa that's pretty intriguing actually:
    [​IMG]
    By Yoel Minkoff.
     
  4. T0rm3nted

    T0rm3nted Moderator
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    I think this one will play out similar to TWTR in that it will go up quite a bit after the IPO, and then will come back down much below the IPO price a few months later.
     
  5. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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  6. T0rm3nted

    T0rm3nted Moderator
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    Haha, funny link. I'm at work so I didn't open it up because of some of those words in the link title! But I get the gist.

    I don't use Snapchat, so I'm not sure if I'm correct, but I'm guessing they don't have a good way to monetize it, similar to twitter. That's why I think it'll take off (it's an extremely popular app) when it hits the market, and then over time people will realize it's very similar to twitter.
     
  7. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    I'm not even sure it will take off, because if it rips it is just asking to be shorted. This is not like Tesla/Amazon/Netflix where people feel passionate about the product succeeding and will support it; and this is not like Facebook which is making $$ and people love supporting $$. I definitely feel like you said, that in some months it will be below IPO price.
     
  8. fthree

    fthree Member

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    hard to say what will happen with snap. The crazy thing is that it almost seems as if everyone is using it but me. Even my 11 year old was denied an account (by me) and said "seriously? its not even bad everyone has it!" If they are smart and have learned from twitter they will do whatever it takes to get some monetization asap.
     
  9. Wolfy

    Wolfy Active Member

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    Wow, 12 months lock up period? how many sheep they are planning to slaughter eh?
     
  10. waqas8521

    waqas8521 New Member

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    So overall wat do u guyz think in short term, and yearly long term ... ?
     
  11. T0rm3nted

    T0rm3nted Moderator
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    I'm guessing it will go up for a few weeks, then sell-off back under the starting share price once all they hype dies down. Purely a guess though and no solid reasoning for it.
     
  12. bigbear0083

    bigbear0083 Content Manager

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    ^^ that's about what i'm thinking as well
     
  13. bigbear0083

    bigbear0083 Content Manager

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    Estimated time of open @ around 10am eastern
     
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  14. bigbear0083

    bigbear0083 Content Manager

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    ...and open @ 24.00
     
  15. StockJock-e

    StockJock-e Brew Master
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    BUY IT ALL! :D
     
  16. StockJock-e

    StockJock-e Brew Master
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    Holding up above $25
     
  17. StockJock-e

    StockJock-e Brew Master
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    Who is going to be the big bear here and say single digits by this time next year?
     
  18. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    This CEO will need to prove himself.
     
  19. StockJock-e

    StockJock-e Brew Master
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    The CEO can just cash out and enjoy retirment!
     
  20. StockJock-e

    StockJock-e Brew Master
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    Chart of the opening day:

    [​IMG]
     
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