
Snapchat is a cautionary tale against leaving unicorns for dead - elsewhen
https://www.axios.com/snapchat-unicorns-wework-uber-lyft-c1f4be4a-6452-4c5f-af89-234764e0c66c.html
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mcot2
Terrible article. Yes it bounced back off of the lows but it’s still not close
to profitable and well under the IPO price. Most of the employees got burned
and have not recovered.

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adventured
> Yes it bounced back off of the lows but it’s still not close to profitable
> and well under the IPO price.

The primary concern is long-term survival and growth, not immediately getting
to profitable. They have plenty of cash at $2.2 billion.

Last three quarters of gross profit improvement:

$116m -> $172m -> $223m

Gross profit margin for those quarters:

36% -> 44% -> 50%

Operating expenses for those quarters:

$432m -> $477m -> $451m

Meanwhile quarterly sales went from $320m to $446m.

That's exactly what the market wants to see. Their path to ending the losses
is extremely clear at this point.

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ecf
Shouldn’t they have figured out all that BEFORE they went public?

Call me naive, but I’m still of the opinion that a business shouldn’t be
business if it can’t sustain itself.

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adventured
Not necessarily, no.

Biotech companies, as one example, frequently can't sustain themselves when
they IPO. They IPO as a means to raise capital to pursue sustainability, to
grow the business - develop product etc - using investor money. That's one of
the reasons the public markets exist, to expose investors to potential upside.

Tesla is very clearly a business and has lost money every year of its
existence.

Amazon lost money for its first seven years, including for several years
following its IPO.

Workday and ServiceNow have been money losing businesses for their entire
histories. ServiceNow took 15 years to get to profitability in its most recent
quarter. They ran losses in the pursuit of faster growth.

Atlassian and Shopify have piled up annual losses for most (all?) of their
histories.

Would investors be better off without exposure to Shopify at a $3.x billion
market cap at its IPO? It's now $36 billion. Investors get to ride their
tremendous business growth (with some obvious risk), which is likely to result
in eventual solid profitability.

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wil421
Most of the companies you named have a product I can name. Workday and
ServiceNow both have large enterprise contracts and it’s not easy to move off
of them, much easier than Oracle or SAP. I work with both of them are the
company I work for has spent millions and will spend millions more.

ServiceNow started as a PaaS and it was hard to sell. Companies didn’t know
what to do with it and it wasn’t until they did ITSM (IT Service Management)
that it took off. They ate the lunch of their competitors like BMC Remedy.

Snap is just another ad company that can fail quickly of users leave.

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mantap
A roulette wheel is not a sensible place to invest your money even if it does
end up on black.

Snapchat is a cautionary tale about investing in fads.

~~~
AznHisoka
And it is still ~30% off its all time high shortly after its IPO years ago.
Sure it has risen a lot from its lows, but that’s cherry picking dates.

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baobabKoodaa
All stocks are below their all-time high almost all of the time. Compare to
IPO price instead.

~~~
AznHisoka
It closed at around $24 at the IPO day... almost 50% off that price. Even
worst that I thought

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rvz
> It went public in early 2017 at $17 per share, sinking below $5 per share by
> the end of 2018.

Well I guess those who threw their money into "dead stock" at an all time low
of $5 at the time, all for it to rise back must have now made a significant
gain for now.

Snap is still not profitable just like Lyft, Uber, Blue Apron etc. But
instead, this article is a cautionary tale of avoiding buying stocks of
unprofitable companies at the IPO price.

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jzl
We all know their their stock has been doing well this year, but anecdotally
(yes, I know, an extremely unreliable metric) it seems that there has been no
rebound in usage or coolness factor. I don't hear anyone saying "I've been
going back to Snapchat more", neither among personal acquaintances nor on
social media or other public channels.

Has anyone? Is their recent growth/rebound limited to any particular
demographic or geographical area? Are they just quietly killing it? Are
advertisers really being drawn back?

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markus92
From what I can see in my social circle, after they fixed that horrendous
interface update, usage has gone up. This is compounded by people becoming
more aware of their social media presence on Instagram. Stories is only part
alternative.

It's also very popular for group chats, for which Instagram has no alternative
and WhatsApp doesn't have the perceived privacy that Snapchat has.

Unfortunately I don't have any numbers to back this, just my perception.

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mikece
"[Snapchat] finally mastered Android..."

What is so hard about making an Android app? Where they trying to make a go
with some cross-platform toolkit that wasn't quite cutting it?

"significantly increased its revenue-per-user..."

 __THIS __is the part on which I wish they would have elaborated. I 'm
guessing it's more than selling targeted ads or user info to data mining
operations.

~~~
ladon86
You have to support thousands of different devices, most of which are
significantly lower spec than iOS devices. Also, the OS is usually running
more concurrent processes than iOS, reducing the resources available to your
app even more. If you’re doing something resource intensive like a
continuously running camera preview with AR effects, these things are likely
to cause you some headaches!

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kerng
Not a very useful article...

Take away: Don't invest in businesses that don't have a solid plan to make
money.

If you bought Microsoft stock in 2017 it doubled. If you bought Snap you lost
half of it.

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trimbo
What a weird non-article.

Anyone who is investing in Snapchat at this point is doing so purely on stock
price speculation. There is no business reason to invest in this company.

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dkrich
Huh. I guess this is what passes as journalism in 2019.

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xwdv
I distinctly remember the moment that I had left Snapchat for dead once it’s
share price dropped to 6 or so.

I was considering buying several thousand shares at that time but when doing
an analysis on the fundamentals I decided to pass. I could have easily doubled
my money and maybe tripled if I had sold at the 52 week high. Oh well. There
will be other unicorns.

~~~
icedchai
If you bought MSFT, AMD, and many other more stable tech companies around the
same time as the SNAP IPO, you'd have more than doubled your money by now,
too. Did you?

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xwdv
Not at IPO but I did buy both at the beginning of the year.

AMD currently has me at a 94.32% return but MSFT is only at 51.33%. Not bad
for the year though.

