
Snap's share price sinks, trades just above IPO price - mudil
http://nasdaq.com/article/snaps-share-price-sinks-trades-just-above-ipo-price-20170615-00941
======
komali2
Facebook is playing pretty vicously - adding stories to _three_ of its apps,
when realistically the only app that is similar to snapchat is Instagram - but
I'm happy for it either way.

Facebook apps do some stupid shit, like in Messenger, why the fuck does the
back button take me into a camera looking at my ugly mug? Why does swiping
down from the top to get to the top of my messages list sometimes again open a
camera to my double chins? What in the _shit_ is going on with the stupid
circles smack-dab in the middle of my conversation history? And why on earth
can't I swap the camera around mid-video in an instagram vid?

But it's nothing, _nothing_ compared to the crime against humanity that is the
Snapchat UX. It is an abomination, and a buggy one at that. I've heard it's at
least more responsive on iPhone, fine. I've even heard arguments that it's
esoteric on purpose - you have to be young and "with it" to "get it." Friends
have to ask eachother "omg how did you do that filter" or whatever, which
allows a moment of millenial smugness. Fine, that can be a reason, and we can
lump it in amongst the thousands of other UX charges we should levy against
Snapchat.

~~~
minimaxir
> But it's nothing, nothing compared to the crime against humanity that is the
> Snapchat UX.

Every time Snapchat's UI/UX is brought up on Hacker News it's _praised_ as "it
facilitates the joy of feature discovery!" (example:
[https://news.ycombinator.com/item?id=10859860](https://news.ycombinator.com/item?id=10859860))

It's a post-hoc rationalization that I am still not happy with. (even moreso 2
years later with more apps like Facebook/Skype copying Snapchat verbatim)

~~~
Karunamon
Devil's advocate:

Instagram is not a "serious" photo app. It's strictly for fun. if you want to
shoot serious pictures, you use a purpose built app, or heck, even the built-
in app on your phone. Making the UI a hide-and-seek game, or at least
abandoning traditional UI design for something that puts form over function
makes sense in that context.

There's an actual game on Steam called "Please, don't touch anything" where
this kind of random discovery is the whole point.

Not sure I'd prejudicially dismiss it as "millennial smugness" though.

~~~
askafriend
Instagram is not just a camera app anymore. It’s strong point is distribution
and discovery. There is a huge pro photography community on there. They all
shoot with serious DSLR/Mirrorless setups, edit shots in Adobe Lightroom and
then post the resulting photos on Instagram for their following to see and
engage with. Do not dismiss the pro use case for Instagram because it is
massive.

~~~
komali2
Yup, this is exactly what I do, though as a hobbyist. My instagram "feed" has
very few pictures not taken on a DSLR and edited in lightroom. My stories, on
the other hand...

------
chollida1
Well........

\- no control by stock owners

\- no immediate plans to produce profits

\- whistleblower lawsuit in the works by former employee who claims they
seriously inflated user metrics

\- a shitload of shares about to become free trading, with a declining share
price, you've got to think alot of employees are going to go stampeding to the
exits rather than holding

\- record short interest by the street

\- one of the main IPO banks (JP Morgan) just cut their target from $20 to $18
for the stock,

\- The same bank doesn't have an almost guaranteed BUY rating on the stock,
and has rated it as a HOLD/Neutral, which is the equivalent of a sell in sell
side analyst parlance

\- a miss on their first earnings

\- their biggest rival, Instagram, is doing well in competing with them, and
they have Facebook's large pile of money and audience behind them

\- and the macro climate of people expecting a market cooling coming soon, in
those cases people tend to flock away from speculative companies to the old
fashioned kind that make money.

SNAP might be a long term good company, but its going to be a rocky ride in
the short term.

~~~
ThrustVectoring
> a shitload of shares about to become free trading, with a declining share
> price, you've got to think alot of employees are going to go stampeding to
> the exits rather than holding

> record short interest by the street

This is double counting the same thing. The reason there's short interest is
because there's a bunch of employees that would like to sell now but cannot. I
suspect that much of these short positions will close out when the lock-up
ends and employees sell into the market.

I wouldn't be surprised if there weren't back-channel deals along the lines of
"you short it now and close when my lockup period ends, and I'll use my
locked-up long position to unofficially hedge for you".

~~~
module0000
Unofficial(as in, one entity hedging for a separate entity) hedging is 1)
illegal and 2) very inefficient and prone to screw you at tax time.

But realistically... you know non-wealthy stockholders(ie employees) want to
cash in, so you buy into the retail sell-off on lockup day, bid it up 3
points, then close when you see the other retail buyers chasing the rally.
Closing several thousand long shares should be sufficient to run their stops,
depress the price, and present you with another buying opportunity at or near
your original entry price.

All that said.. guessing what will happen with the market is how you lose your
money, and fail at day trading before you ever got started.

~~~
alasdair_
If, say, a person owns $5MM of snapchat stock and their spouse knows this, can
their spouse (acting rationally) not simply short or buy a put option for some
portion of this?

They didn't agree to anything in the RSU agreement and no long as the spouse
wasn't acting on insider information and simply wanted to hedge, I'm not
certain a crime would have been committed, unless the person owning the shares
actually asked their spouse to perform this action.

~~~
module0000
On paper: yes, that sounds good. BUT, if the SEC comes knocking...they operate
in a way that looks like "guilty until proven innocent", and having your
spouse do it appears at first glance as guilty. The RSU agreement would be
important to see though, they may have some bits about spouses and immediate
family - or they may not(in which case what you described is 100% above
board).

If anyone holding RSU's is (legally) able to show the RSU agreement, it would
be insightful to read.

------
wonder_bread
Seems like kind of a prime time to increase your holding if you bought shares
on the IPO and have any faith in the vision of the company. Having such an
intense fight against such a dominating company could kill Snap, or it could
be the disadvantage they need to be successful in the long term.

How often is it that the now-huge tech (or any industry) firms DON'T go
through trying times when they first appeared on the markets?

-Apple kicked Steve Jobs out of the company convinced the monolithic giant IBM was going to cut them out of the equation.

-Amazon almost went bankrupt when the market crashed

-Facebook dropped for almost a year when it wasn't obvious how they were going to monetize their mobile platform profitably

-Nike got hit with a customs battle brought on by Converse for millions

Obviously it remains to be seen whether they will show the resilience the
aforementioned companies did but the fact that some are already speaking of
Snap in the past tense is kind of crazy, they've had ONE quarterly report come
out since the IPO.

~~~
mrleinad
This is the analysis I make based on what someone with a lot more experience
in the markets told me a few days ago, related to $SNAP.

\- Apple was a company that sold computers. SJ being kicked was an relevant
event for the company, but it still sold computers and was worth something.

\- Amazon was an intermediary between sellers and buyers. Today is a company
that invested a lot in other things and is worth something.

\- Facebook could be monetizing something, but it's still just a webpage.
Remains to be seen if it's worth something, so their shares are crap (this is
from a fundamental point of view, regardless of whether they keep rising)

\- Nike sells shoes. It's worth something, though it's not a fundamental
company for the market.

SNAP, on the other hand, has some face recognition algorithms, and created a
free app. That's it. It produces nothing. It's a worthless company when it
comes down to the assets it has and the product it sells.

~~~
askafriend
This is an incredibly flawed argument and comes from an incredibly flawed
perspective on “worth”. The most valuable thing Facebook has is distribution
and that is absolutely worth A LOT. Not only that, but it has _unprecedented
global distribution_ backed by engagement numbers that keep the value afloat.
You’re trying to impose the values of a physical goods economy onto one that
is purely digital and the concepts don’t translate.

Whoever that "someone" is, probably isn't as experienced in the markets as you
think.

~~~
mrleinad
I know for a fact he has over 25 years experience in the markets.

The concepts don't translate, that's for sure. However, to claim that Facebook
is worth something if they just keep collecting data and we see nothing being
done with that, is just wishful thinking.

Amazon invests in research and built a PaaS/SaaS service that's worth a lot.
It innovates on several products like Kindle and Echo. Owns patents that are
worth something.

What's the ACTUAL commercial value that Facebook is bringing to the world and
to people that's making it so worthwhile? Sharing pics? Getting customized
newsfeeds? Having yet another channel to communicate with your aunt or with
that customer service? What do we lose if Facebook goes away tomorrow?

~~~
askafriend
The actual commercial value is what I stated: _unprecedented global
distribution_ driven by content (some of which is user-generated and some of
which is partner-generated).

It's the model that has worked for TV, Radio, and Newspapers but in the new
world the integration points are different from those old models making the
chain of value much different.

Here's a short article that'll help explain it better than I can:
[https://stratechery.com/2015/aggregation-
theory/](https://stratechery.com/2015/aggregation-theory/)

By your friend's logic, AirBnB doesn't have any value either.

~~~
mrleinad
Exactly. The same logic applies. It's a glorified hotel reservation site.

~~~
askafriend
You really think AirBnB has zero value?

Yes AirBnB is a glorified hotel reservation site, but isn't a car just a
glorified horse and buggy? I guess I just don't understand how you could be so
dismissive in the face of something so clearly valuable and so clearly wanted
by the market.

------
htormey
I think people are writing off Snapchat prematurely after its first soft
quarter. It takes a long time to build a successful advertising driven
consumer application.

I agree that Facebook’s aggressive cloning of stories has impacted Snapchat
but I think Snapchat is more than just a one feature company.

I’d give it at least a year or so before declaring Snapchat a losing
proposition. I say this because making significant changes to a product at
Snapchat’s scale, I.e shipping new features, takes time.

Unlike Twitter, I’ve been impressed with the amount of product that Snapchat
has shipped over the last few years. I think the ability to ship a lot of
product is a key thing that a lot of arm chair analysts neglect when talking
about these applications.

I’d also add to the above that I think a lot of people on his thread see
Snapchat and Instagram as interchangeable applications. I’m not so sure about
that. I use both for very different purposes.

Another point people seem to forget is that Snapchat own Bitmoji. That app has
been consistently in the top 5 apps on the AppStore every time I’ve checked
over the last 6 months.

I think the fact that Snap were able to buy another social company and not
mess it up is highly underrated. Especially when you compare Bitmoji to what
happened with Vine at Twitter.

------
kinkrtyavimoodh
Most of the comments here already talk about UX or other standard 'issues'
with Snapchat, so I wanted to raise a different one—

On Snapchat, there isn't much to do once you're done seeing your friends'
snaps.

Instagram has an amazing discoverability feature, plus, you can go around
visiting other people's profiles as long as they are public. Ditto on FB,
where there is an endless list of things to do and see and explore without
interacting with anyone or letting them know of your actions.

On Snapchat, there is nothing of that sort. Snaps are temporary, Stories only
stay for 24 hrs, and you can't see anyone's content without them getting a
notification (last I checked).

Sure, this prevents 'stalking', but that comes at the cost of engagement.

~~~
peasantking
> On Snapchat, there isn't much to do once you're done seeing your friends'
> snaps.

I'd argue that this does keep you coming back regularly to see what's new

~~~
kinkrtyavimoodh
You get notifications when people people send you snaps. 24-hour stories don't
need you to be on the app the whole time. For example, I check my Instagram
and Messenger stories once a day and that is good enough.

------
ChuckMcM
One need only look at Facebook which traded well below its IPO price 6 months
later to understand this is a non-metric. All it "means" as far as I can tell
is that the traders who got their 'bump' in the IPO wanted to dump their
holdings and so have been continually selling. It will be really interesting
when internal shareholders (aka employees) get unlocked and can sell their
shares. A lot of people using their now vested and tradable equity to convert
it into something like a down payment or a new car. Once _that_ first wave has
passed, then you can start looking at the stock price and trying to see what
the market thinks of the company.

~~~
bogomipz
>"All it "means" as far as I can tell is that the traders who got their 'bump'
in the IPO wanted to dump their holdings and so have been continually
selling."

Can you explain what is a 'bump' that traders get in the IPO?

~~~
ChuckMcM
Simply put, most IPOs are 'priced' such that the stock will go up after the
IPO. So traders during the roadshow agree to buy shares at the IPO price and
then they turn around and sell those shares for a profit when the stock goes
up and people (nominally retail investors) are trying to buy the stock. They
do this carefully so as not to put the stock in a huge tail spin.

So lets say you're Fidelity, and you've got a billion dollar fund, you take 10
million out of that, commit it to the IPO and sell it when the stock goes up
20%. You now have 12 million to put back into your fund and you've added 2
basis points to the "return" for your fund (shares are now worth 1.002 B$.)

The trick though is that you are not really "investing in SNAP" so much as
you're taking advantage of a pricing advantage of a highly anticipated
offering.

~~~
bogomipz
Sure, the "road show" is to sell to big institutional investors like pension
funds, sovereign wealth funds etc but not to "traders" per se. I think that's
what confused me. I'm guessing someone like Fidelity might have their own
trading desk?

------
minimaxir
Snap hedged their existence on the Spectacles/hardware
([https://www.spectacles.com](https://www.spectacles.com)) to the point of
rebranding themselves as a "camera" company in the SEC filing.

Has anyone seen/heard about the Spectacles used since the initial hype?

~~~
capkutay
The roll out for spectacles was horrible. Where the heck do I get one? If I
can't find them while living in Downtown SF, I don't know how they expect
Spectacles to get any traction.

~~~
sebleon
> If I can't find them while living in Downtown SF

That's the beauty of their roll out. Keeping it out of the hand of SF techies
during launch helped create a cool brand for these in a mainstream audience.
Google Glass' association w geeks helped cement their failure in the broader
market.

~~~
kinkrtyavimoodh
Except Downtown SF is not just techies. It's plenty of so-called 'cool' people
too.

If he were expecting to see them in Sunnyvale maybe you'd have a point.

~~~
seppin
> Except Downtown SF is not just techies. It's plenty of so-called 'cool'
> people too.

ehhhhhh

> If he were expecting to see them in Sunnyvale maybe you'd have a point.

yeah ok

~~~
sebleon
<laughing emoji /><laughing emoji /><crying emoji />

~~~
kinkrtyavimoodh
:D

------
neuronexmachina
"Snapchat is popular among people under 30 who enjoy applying bunny faces and
vomiting rainbows onto their selfies, but many on Wall Street are critical of
its high valuation, slowing user growth and lack of profitability. Snap has
warned it may never become profitable."

~~~
t4h9drg
"Snap has warned it may never become profitable."

Then why the hell was there an IPO?!?!

~~~
quantdev
They "warned" in an SEC filing that is supposed to state possible investor
risks. The way this was reported is the problem and not Snap's statement,
which any investor should understand is factually correct.

Snap is a volatile play: there's a high chance, maybe bigger than 50%, that it
never becomes profitable, as they warn, and there's some small chance it
becomes extremely profitable. The real question is, what's the net present
expected value?

------
brightball
Isn't that pretty normal in the months post IPO while everybody gets past the
initial excitement while the business starts working on long term plans with
all the money?

------
dando
A huge part of the tech market is down like 10%

------
noamsml
I'm no expert on snapchat, but one thing I can say from personal experience
being at an IPOing unicorn -- until about a year into our IPO, we were a "no
buy", and all of these giant companies were ostensibly going to crush us with
products that didn't even compete with us. Then, one year and a couple of
earnings calls in, we're suddenly a "buy" and people consider us stable and
successful. What did I learn from this? Never trust the stock market, and
doubly so do not trust the stock market with a new stock.

~~~
dilemma
I think the leason is to have a viable business with earnings.

------
sjbase
Worth pointing out that tech stocks are down heavily in June, esp. consumer
tech [1]. Some portion of this decline is unrelated to investor confidence in
Snapchat relative to FB etc.

[1]: [http://www.cnbc.com/2017/06/09/big-five-tech-stocks-sell-
off...](http://www.cnbc.com/2017/06/09/big-five-tech-stocks-sell-off-facebook-
apple-amazon-microsoft-alphabet.html)

------
eganist
I just don't like what Snap did to the Windows Phone platform. They
consistently blocked all opportunities to place an app on the service even
when offered to do so with some form of partial or total subsidy (citation
needed, but I'm pretty sure I'm referring to 6snap here).

So in that regard, I'm oddly happy about what's going on.

~~~
alasdair_
The problem is that (effectively) no one uses that platform. It's not just the
initial creation that is the problem - maintaining a windows phone app over
the years to come would be a real pain in the ass, and would slow future
updates.

~~~
underwater
There were existing third party apps that they forced to shut down.
Understandable if it's competing against a native app, but that wasn't the
case.

------
mikek
There is large downward pressure on the stock due to an impending lockup
period expiry.

[http://www.marketwatch.com/story/snap-short-sellers-bet-
on-a...](http://www.marketwatch.com/story/snap-short-sellers-bet-on-a-post-
lockup-tumble-but-it-isnt-a-sure-thing-2017-06-08)

~~~
acchow
Why wouldn't this have been priced in?

Why does everyone and their uncle think they can predict stock movements with
lockup periods?

~~~
module0000
"Why does everyone and their uncle...."

They don't. But every amateur with zero experience does.

------
mmanfrin
"Sinks" is a particularly strong word for a 3.4% drop on the day after a rate
hike and during a 'tech selloff'.

------
module0000
Want to know what the stock is going to do? Look at your order book in PM on
lockup day. Liquidity on either side will indicate short term direction, and
the liquidity vacuum on the other side will indicate longer term direction.

disclaimer: short term is 10-15 minutes, long term is 1h or more up to RTH
close

------
nemo44x
On Hacker News we are enthusiastic about Snapchat as a technology without any
value in terms of being technologically interesting or useful. But yet we are
littered with blockchain skeptics.

------
usuallybaffled
Isn't it weird that the stock exchange where you're also runs an article with
your smashed logo? I'd expect a more "robotic" reporting from nasdaq.com

~~~
ceejayoz
It's a Reuters article. NASDAQ presumably purchases a feed for financial news.

------
dzonga
The stuff that made Snapchat fun i.e Filters, Stories are becoming native to
the platform e.g through ARKit and being copied aggressively by Zucker Zucker.
I feel sorry for them, even though they were a pioneer into to leverage the
smartphone's camera. Irrelevant but maybe relevant point, is us college guys
mostly use it to chat with girls or just to be sure girls we wanna fuxk look
good.

------
andreasklinger
While i am personally very skeptical about Snap.

We had similar blogposts about facebook - even google to an extend.

~~~
rchaud
The difference with FB was that it rapidly shifted out of its "exclusive" user
group by expanding outside of university email address holders to allowing
everyone and their grandma from joining. Once Snap inevitably cleans up its UI
to stoop to trying to attract older audiences, what appeal will it have?

------
steevenwee
I wonder if Facebook going to repeat that.

~~~
acchow
FB had $10.2bn net income in 2016 on $27.6bn revenue. How can it drop back to
its $100bn IPO valuation?

~~~
zjaffee
If FB were to stop growing at the rate it has been, ~100bn would be a
reasonable target market cap, given a P.E. Ratio of around 10.

~~~
acchow
2017 is half over. Facebook is going to make about $14bn net income in 2017.
At a PE of 10 that's $140bn.

The S&P has an average PE of 15.6. That brings us to $218bn.

It's mindboggling any of you can think FB would drop back to IPO valuation at
this size. Maybe in 40 years when the world has changed dramatically and most
of us are retired or dead.

