
Snap falls to IPO price - prostoalex
https://www.usatoday.com/story/tech/talkingtech/2017/06/15/snap-inc-falls-ipo-price/102892650/
======
habosa
$17.00 was the IPO price but only for investors with access. Your average
investor with an eTrade account saw a price of $24.00+ when the market opened
that morning, and it hit almost $27.00 that day. So those folks have seen a
30%+ drop since IPO.

Given that Snap paid out billions in IPO bonuses to executives and other
employees, it's turned out to be a pretty big wealth transfer from retail
investors to Snap employees.

~~~
acchow
Did you try to subscribe to the IPO? It was not hard at all. I'm an "average"
investory with a standard Charles Schwab trading account and subscribed to it
with a few clicks of my mouse. I imagine anyone else could with their
brokerage. It was oversubscribed tho, so I got half the quantity I wanted and
sold shortly after opening.

~~~
kartD
Thanks for the info, I think my next bank account is going to be with Charles
Schwab ( I was waffling between Ally and Charles Schwab, but this is a useful
feature for me and a good step up from Robinhood).

~~~
acchow
I was referring to the trading account, which is independent from the bank.

Tho Charles Schwab bank accounts are useful because they refund your ATM fees.

~~~
tanderson92
Free checking account helps too; they sent me two boxes of checks and a
checkpad with a $0 initial balance, for no fees.

And they offer you commission-free trades too if you offer to transfer in
enough funds.

Great, great, place to keep your finances.

~~~
toomuchtodo
How's their mobile app on iOS?

~~~
jnisenbom
Pretty similar to android (IMO)

~~~
legolassexyman
Are you a Marx Brother? Sheesh.

------
skywhopper
As skeptical as I am that Snap will ever be a moneymaker, this data point is
not meaningful in any way. Facebook traded below (often _well_ below) its IPO
price for the first 15 months on the market.

~~~
likpok
Facebook was profitable before it went public, and faced serious strategic
challenges immediately post IPO (specifically, mobile was exploding and
Facebook's mobile story was not good -- it didn't even have advertising).

I guess the meaningfulness of this data point is that people are dubious that
SNAP will succeed long term. But that's somewhat tautological: if people
thought SNAP would succeed, they'd buy it.

~~~
capkutay
Facebook's mobile story 'was not good'...but it was clearly just a missing set
of features in a product that was ripe for infiltrating mobile and they had
the cash to buy to eventually buy instagram.

The question is whether Snapchat is fundamentally flawed or a few features
away from becoming a strong company.

It just seems to me that they have too much competition against Facebook...a
behemoth that's still innovating.

If some company came out with a cool twist on search after Google, I'd be
bearish on them as well.

~~~
kungito
How exactly have they been innovating in the last 5 years? They bought
Instagram and WhatsApp and added SnapChat features to them

~~~
capkutay
They're still an innovative company. They have one of the world's strongest
engineering organizations and an executive team that has the vision to jump
into new, hot areas. By all measures they're still innovative especially for
their size...

------
cft
Financially it does not matter for the founders that much anymore. Significant
wealth has already been transferred and cashed out:

[http://www.nasdaq.com/quotes/insiders/spiegel-
evan-1016829](http://www.nasdaq.com/quotes/insiders/spiegel-evan-1016829)

~~~
adventured
There are only a handful of people on the planet that could reasonably claim
that $1.4 billion doesn't matter that much to them (and none of them are
likely to actually hold that belief).

It's an absurd premise to claim that 80%-90% of someone's wealth does not
matter much to them. Not to mention implying all sorts of horrible things
about their character in the process (to claim what you are, is identical to
claiming that Spiegel is ok with losing that money as opposed to keeping it
and doing something good with it, that he would feel indifferent to the
contrast of said scenario).

~~~
tanderson92
I believe the point is more about the marginal utility of wealth and what
additional products and services $1.4 billion can buy relative to the $250+MM
net worth they have now.

~~~
JumpCrisscross
$250 million means I need to fundraise to build my spaceship. With $1.4
billion, I can get started on a Dyson sphere. Depends on your goals.

~~~
gpolak
If you think you can completely encompass a star for quarter the price of an
aircraft carrier, damn what's your secret? :)

~~~
ceejayoz
You just have to build one little robot capable of building another robot out
of lunar regolith.

------
beager
What does $SNAP need to do to deliver on the hype? Is there anything that can
make $SNAP a good investment for anyone other than the parties involved in
trading the IPO?

I tend to be bearish on $SNAP in general, but I'm interested in the
discussion. How do they right the ship and boost back up to that $25-30 range?
What's their play?

~~~
nikkwong
+1 this. I've asked multiple people and ideas are mostly mixed on what Snap's
strategy should be going forward. Being a social app will definitely be a
difficult play. IMO they could try to leverage their AR expertise to do, well,
something. But social definitely seems like it will be tough.

Good luck to the team though. It must be a stressful time there.

~~~
jayess
The fact that no one is responding with ideas tells you what you need to know.

------
mmanfrin
Pardon my language but: no fucking shit. $20bil was _unbelievably_ overpriced.

This is the one major tech stock that I simply do not _get_. ~$125 a user is
insane.

~~~
acchow
Facebook is >$200 per user.

~~~
dna_polymerase
Facebook grew so much, almost everyone has it and its use cases are versatile
(and therefore the data collected). Snapchat is really just used by younger
folks with almost no financial power for chatting in the weirdest way.

~~~
skinnymuch
Like nick, I'm close to 30 years old too. Snap is big in all my social
circles. Mostly people between mid 20s to early 30s. Less popular the older
you get, but still significant. Regardless, all have enough buying power.

Even if Snap never gets much traction past people in their 30s, that's enough
of a market to expand for quite a while. The 18-34 demographic is the most
coveted. The pre-teen and teen market isn't something to completely sneeze at
either.

~~~
symlinkk
Popular does not mean profitable! I feel like the tech industry has confused
the two over and over again.

~~~
skinnymuch
Of course. But getting popular is an important part of being a big social
media company. Profits of $100M on under $1B in revenue isn't going to help
things much for Snap if that's not growing because they don't have enough
users.

------
stevenj
I think Snap's stock price will continue to fall (to under $10) and then at
some point it'll be acquired, possibly by an asian company or investment
group.

------
JumpCrisscross
Lock-up expires 29 August [1]. On the other hand, they have $3.2bn of cash and
short-term investments (as of 31 March) while burning about $600MM of cash
from their operations (FYE 31 December 2016) a year. That's 5 years to get it
right.

EDIT: insider lock-up at T+150 comes in at the end of July.

[1] [http://www.nasdaq.com/markets/ipos/company/snap-
inc-899497-8...](http://www.nasdaq.com/markets/ipos/company/snap-
inc-899497-82723)

~~~
chollida1
> Lock-up expires 29 August [1].

Its actually the end of July for the first and most important IPO lockup
expiry.

> The first key lock-up date for Snap will occur roughly 150 days following
> the IPO. At that point, pre-IPO investors, such as company insiders, will be
> allowed to sell their shares. The second major lock-up date applies to 25%
> of the shares that were offered in the IPO itself. Of the 200 million total
> IPO shares, 50 million of the shares will be restricted for one year.

~~~
jonbarker
Founding team cashed out pre-IPO for hundreds of millions each.

------
korzun
I think it is safe to say that the IPO was a total scam. The company was never
profitable, and numbers never made any sense.

I have a bridge in Brooklyn up for grabs (cheap) if you still think the
valuation was based on ridiculous data points such as active users, etc.

People already lined their pockets up and you will be reading another P.R
piece on how great of a businessman Evan is within the next couple of months.

Spend all of the funding on aggressive marketing to get the numbers up pre-
IPO, file for an IPO and cash out. Rinse & repeat.

~~~
gruez
Is it really a scam if there was no deception and every buyer knew what they
were getting into?

~~~
cocktailpeanuts
is pyramid scheme a scam?

~~~
NDT
Yes, people that buy into them are just dumb.

------
chollida1
Not sure this is really news worthy.

They've been heavily shorted for a while now and their puts are expensive. But
really 1 Billion new shares could flood the market in just a few more weeks.

To put it in perspective I believe Twitter, the other poster child for giving
away options, had about half that amount.

Even the IPO underwriters are starting to crack. Credit Suisse used the stock
drop to keep an "outperform" rating on the stock while lowering its target
from $30 to $25.

IMHO Snap will do just fine for hte next year. They are big enough that
companies will carve out a piece of their marketing budgets for Snap. It won't
be until a year later when they have enough data on how well their Snap
advertising is working that they'll decide if its worth it or not.

------
zitterbewegung
Following snapchats fluctuations about its stock price is somewhat interesting
. To be honest though I'm getting fatigued on this. I remember when Facebook
IPOed and we were getting similar posts. The fact that Snap was able to IPO
and get money to become more competitive will have to wait for a few quarters
though.

~~~
naturalgradient
I think the situation is not comparable at all precisely because Facebook did
not have a larger network strangulating their growth.

I wonder if there is any precedent for a social network (or any large
application for that matter) having their growth stalled to single-digits and
then it picking up again.

To me, it looks like there is a very real possibility that facebook already
killed them in the sense that they will never go beyond 250 million or so
users, which does not support their valuation. So share-wise, they might end
up a second Twitter, just with a much faster turnaround this time because user
growth has already come to a grinding halt.

------
bsaul
i wonder if the community realizes how bad those kind of overhyped companies
makes us look to the general audience, with founders cashing out shortly after
the stock gets public and everybody realizes valuation were simply absurd.

i don't think we'll have to wait for a long time before we see traditional
investment funds and banks not willing to take part in that game anymore.

------
dfrey
snapchat baffles me. It's just another instant messaging platform except that
they came up with the idea of messages that delete themselves after a time
period. The problem is that this killer feature is easily subverted by taking
a picture of your screen. So basically, they have provided an instant
messaging platform with one extra useless feature.

~~~
beager
More to the point, this "killer feature" is easily cloned by a competitor and
shows that the product creates no competitive barriers. Coupled with the fact
that the cloner has a much better idea of their users and can target ads much
more successfully, this creates a long road for $SNAP.

~~~
DrScump

      More to the point, this "killer feature" is easily cloned by a competitor
    

... which is why I was skeptical of Groupon's value from the outset.

~~~
beager
And much has been written of that, and that's exactly the same way I feel
about Uber.

(And every time I mention that about Uber on HN, people point out that _they_
can get Uber in any city in the world, so why would anyone who never travels
use anything else?)

------
andirk
With no knowledge other than using the app and from general bar talk, I saw
this as a huge flop. I wish I shorted it. It may have potential, but I don't
see what that potential is when their features are so incredibly easy to
mimic. And no, SnapChat, I don't care what Puff Daddy did with Beyonce or
whatever it is their news feed tells me.

------
havella
As an excercise for the reader, would be interesting to test the performance
of a buy and hold strategy of stocks a.) Going below IPO price, b.) Going
below 50% IPO price. A second filter that can be applied is the time span
between first day of trading of such event.

------
Rjevski
I can't understand what are they doing to not make any profits. They are
selling ads. Server resources to exchange the pictures are a minor cost, so
where is all that ad money going to?

If they stopped wasting money on development time making their UX even worse,
or stupid stuff like Spectacles, or this:
[https://www.recode.net/2017/6/17/15824222/snapchat-ferris-
wh...](https://www.recode.net/2017/6/17/15824222/snapchat-ferris-wheel-cannes-
ad) \- maybe they would actually be making profits right now.

~~~
olegkikin
They have 1-5K employees. Even if you take a median salary of $40K, that's
$40-200M/year. That's just the salaries with no taxes/overhead and no
consideration that IT salaries are generally much higher.

~~~
pcurve
Snapchat has 2000 employees roughly. But why?

And why does twitter need 4000 employees?

What do they all do?

edit: n/m. Their job postings are quite telling.

[https://www.snap.com/en-US/jobs/](https://www.snap.com/en-US/jobs/)

[https://www.youtube.com/watch?v=oEli06ID6t8](https://www.youtube.com/watch?v=oEli06ID6t8)

------
smpetrey
For your consideration, not a single share purchased is a voting share. SNAP’s
shares should be closer to $13.

~~~
pgwhalen
I'm curious, why $13? Why not worthless? (I don't believe they should be
worthless, but I'm curious how you decided on the precise middle ground)

------
gigatexal
maybe twitter should buy them

------
mmmpop
Invest in the things you love and use most! What could go wrong?!

~~~
andirk
but dikpiks can only get you so far, no matter how wonderful we all
collectively think they are. I think this was L.A.'s attempt at a Silicon
Valley.

------
nicolrx
All my friends are turning off their Snapchat account to keep using Instagram
that does the same + better photo features.

------
opendomain
Is is much below the IPO price now

currently 15/62 but trending lower

This is before the lockup period ends when ususal new stocks drop

------
jdavid
Based on revenue and flat growth, the company is worth about $4 a share. If it
get's to that price I'll think about buying in, if and only if i think the
company is going to turn it around.

I've made good money waiting for the time to be right before buying in. This
stock is worthless above $8 a share.

~~~
speg
Why not making money in the meantime going short?

