
A growing number of traders are betting Snap’s stock price will fall - champagnepapi
https://www.bloomberg.com/news/articles/2017-06-08/snap-is-most-shorted-tech-ipo-of-2017-as-lockup-expiration-nears
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chollida1
We are about to get a very insider opinion on just how well SNAP is doing.

I mean if there's a huge deluge of shares coming available for trading on lock
up expiry date then that's can be taken as a pretty bearish sign that
employee's don't like where the company is going.

Are employee's going to be scrambling to cash out on the first day or are they
gong to hold onto their shares because they feel they'll be worth much more in
the future?

SNAP did just start having options trading for it so that should help a bit to
relieve the short pressure.

> Traders also own more bearish put options than bullish call options, with
> put open interest being about 70 percent larger than the number of calls
> outstanding Wednesday, data compiled by Bloomberg show.

This actually seems just as important as the short exposure.

 __EDIT __Just so I don 't sound like a heartless ass.... No one is saying
employee's should sell stock and diversify, that's just prudent.

But there is a huge difference from employees selling 20% of their holdings vs
50%+ on the very first day/week they are allowed to sell.

~~~
jonas21
> if there's a huge deluge of shares coming available for trading on lock up
> expiry date then that's can be taken as a pretty bearish sign that
> employee's don't like where the company is going.

Is it really? If a large portion of your net worth is in shares of a single
company that you also work for, wouldn't it make sense to sell your shares
even if you think the company is going to do well?

~~~
Beltiras
Depends on how you time it and what you think the prospects are. Skittish
Facebook employees missed out on a quadrupling of value if they sold in the
first six months.

~~~
Stasis5001
Sure, and what about skittish Groupon employees?

~~~
jonknee
Well that's kind of the point about watching to see what happens when insiders
are allowed to sell...

------
erikpukinskis
Anecdotally my one Snap user data point has been wooed by Instagram Stories.

Insta seems to be the juggernaut in the media stream space. It's not clear to
me how Snap competes since Insta isn't some crufty Suite like Facebook or
Microsoft. They can radically change the UI just as easily as Snap to keep up
with needs. The underlying tech is all known concepts.

Maybe Snap can differentiate in some kind of AR features, but they're really
just scraping by there with a fairly minimal offering. Still, that's where I
guess I would focus if I were them: great creator authoring UIs, and advanced
psuedo-authoring (filter long tail) for end users.

Hard to argue you're going to beat Insta on filters tho.

Edit: oh yeah, Snap can win a segment on privacy. Although Facebook seems like
a more natural place for friends-only stuff. Snap has to fight network effects
there.

~~~
eckza
The primary focus of Instagram is achievement broadcasting.

The primary focus of Snapchat is messaging.

Snapchat's messaging platform is also heavily gamified. There are a lot of
very clever psychological incentives to continue using the platform on a daily
basis, which drives user engagement through the roof.

Instagram's messaging platform feels bolted-on, secondary. I would never
consider using Instagram as a primary method of communicating with someone,
but I use Snapchat as a primary method of communicating with people on a daily
basis.

~~~
wcummings
Snap is basically the only social network I use at this point (except IRC, if
you count that), mostly because it's fairly trivial and fun (same as IRC :).

Take stupid pictures, draw stupid crap on top, send it to a "chat room",
forget about it forever. To me SnapChat is a chat app with some cool
multimedia features. I never ever use stories (the feature Instagram has
notoriously cloned). Other than marketers, who is using stories? Very few of
my friends do.

Instagram seems like douchey lifestyle porn to me. For example, the presence
of "likes" is _very_ off-putting to me. I can't be the only person with this
brand association.

------
trevyn
If you want a real insider look at Snap, try living in Venice Beach for a few
months, and try to get a feel for how Evan specifically spends his time. There
are many red flags.

~~~
blizkreeg
what do you mean by that?

~~~
BigChiefSmokem
That Venice Beach is not too happy to have Snap as a resident, I'm guessing?
[https://la.curbed.com/2017/3/1/14778860/snapchat-protests-
ve...](https://la.curbed.com/2017/3/1/14778860/snapchat-protests-venice-beach)

To me the problems in Venice speaks to their staggering growth so it's
probably a good signal of their ambition.

However, I did not like that mostly wasted retail space they had on the Venice
boardwalk to show off their new glasses. The workers seemed bored, the
security seemed bored, probably because no one was really approaching the
displays. Seems like a huge waste of money and completely out of place with
the vibe on the beach. If anything it reinforced to the average person walking
by the typical perception of tech companies as careless elites bent on
displacing the fringe classes.

------
xpose2000
Lockup expiry is always a scary time. The same stuff happened to Facebook
combined with mobile monitization and user growth fears made the stock tank to
the 40s.

Though these are two very different companies. Best of luck to owners of Snap
stock.

------
meagher
How much do headlines like this cause a self-fulfilling prophecy?

~~~
qznc
Trading is an echo chamber full of self-fulfilling prophecies since forever.
The fun thing is that there are so many of these prophecies are around that
they usually cancel out.

[https://cdn.shopify.com/s/files/1/0060/6102/products/book_bu...](https://cdn.shopify.com/s/files/1/0060/6102/products/book_buy_sell_sell_new_1024x1024.jpg?v=1291137799)

~~~
blibble
absolutely, and it should be clear to everyone that the last 12 months has
thoroughly dispelled the market's predictive power

------
edoceo
When they crying, I'm buying

------
paulpauper
No free lunch. The EMH means the lock-up expiration is already priced into the
stock

~~~
JumpCrisscross
> _The EMH means the lock-up expiration is already priced into the stock_

There are various forms of the efficient market hypothesis. The weak form
holds that all public information is efficiently priced into the market. The
insiders selling on lock-up expiration have access to non-public information.
Such non-public information could range from firm-level material, _e.g._ state
of hiring or product development, to individually material, _e.g._ that an
employee is in debt or really wants to go on vacation.

------
gaetanrickter
Snap is worth a tiny fraction of facebook, just as facebook is worth a tiny
fraction of Google when comparing global numbers in users and revenue. It all
makes sense.

~~~
skinnymuch
Are you sure? Facebook doesn't seem to be a tiny fraction of Google in any of
the comparisons. For profit, FB is looking to get to $1B/month in a few
months, while Google has topped $2.5B/mo and is looking to get to $3B/mo.
That's just 3x. Sure Google's revenue is more than 3x. If I had to make an
educated guess, I'd say it's 5x as much. Whether you're talking just Facebook
and Google for global users or including their subsidiaries, neither would
have FB as a tiny fraction. FB already does 2B monthly users. Google likely
isn't even double that just based on the number of internet users outside
China.

Correct me if I'm wrong.

~~~
gaetanrickter
\- YouTube 1B

\- Gmail billions

\- Android 2B

\- Search billions

and the list goes on Now think about its hardware efforts on developing TPU's
for AI.

Here's how billions of people use Google products, in one chart
[http://www.cnbc.com/2017/05/18/google-user-numbers-
youtube-a...](http://www.cnbc.com/2017/05/18/google-user-numbers-youtube-
android-drive-photos.html)

~~~
skinnymuch
You didn't respond to the comment reply to you so I'll repeat - many users
overlap. My original point stands - FB at 2B users monthly means they can't
possibly be a tiny fraction because of the current amount of internet users
especially when Google doesn't have a dominant share in China.

Plus you brought in other products/subsidiaries so then we have to include:

Messenger - 1B+ users

WhatsApp - 1B+ users

Instagram - 750M users

Of course I know the overlap is huge. Do you recognize you're wrong, is that
why you didn't respond? That's fine then of course.

------
yanivleven
no shit! a multibillion dollar valuation on almost no revenue and no growth in
the foreseeable future, with competition from Instagram and FB.

~~~
arjie
Haha. A while back I searched HN for the Facebook share price drop posts and
those were "No shit!" too. Turns out everyone's really good at predicting the
present.

~~~
StavrosK
> Turns out everyone's really good at predicting the present.

I predict I'm going to steal this quote.

------
SirLJ
you have to have a risk management strategy, you cannot hold the majority of
your net worth in one single company, no mater if it is Berkshire Hathaway,
Apple or something else...

------
sjcsjc
"A growing number of traders IS betting Snap’s stock price will fall"

Pointless pedanty on my part, no doubt, but I believe there are lots of people
here trying to improve their English. The verb is "is" because the subject of
the sentence is "number" (not "traders").

~~~
bogomipz
"Number of" is a prepositional phrase that qualifies the noun "people."
"Number" is not the subject but rather "traders" is and so the verb agrees
with traders.

Another example:

"A large number of people are gathering." "A large number" isn't the thing
doing the gathering the people are.

Prepositional phrases are easy to spot. This a good quick read:

[http://www.chompchomp.com/terms/prepositionalphrase.htm](http://www.chompchomp.com/terms/prepositionalphrase.htm)

The key point is that "a prepositional phrase will never contain the subject
of a sentence."

A simple mnemonic device kids are taught to identify prepositions is the
"preposition mountain":

On the mountin, of the mountain, from the mountain, in the mountain, under the
mountain, by the mountain, along the mountain. If it's logical in relation to
"the mountain" it's probably a preposition.

It's worth nothing that there are many native English speakers that get these
wrong :)

~~~
potlee
How would you explain this sentence?

"A growing number of traders is causing better liquidity for SNAP stock"

~~~
bogomipz
I would explain it as improper English.

