Instant Messaging App Snapchat-Maker Snap's IPO Opened Trading At $24 a Share, Making the Company Worth $33 Billion (recode.net)

Snap, the company behind instant messaging app Snapchat, went public this morning at price that values the loss-making tech company at $33 billion. Here's how the investors are valuing the company: At $33 billion, investors are saying Snap is worth 35 times what it's estimated to generate in sales this year, or about $936 million, according to eMarketer. Compare that with Facebook, which is currently worth about 10.5 times its estimated 2017 revenue. In other words, investors, for the moment, think Snap has three times more potential value than Facebook. That's a big bet. Snap lost $514 million last year on $404 million in revenue. Compare that with Twitter, which lost $79 million the year before its IPO, while Facebook made $1 billion in profit. Snap has 158 million daily active users. Facebook at its IPO had 845 million monthly active users and 483 million daily active users.

Comments

Thirty-Three Billion

[sexconker]

As Megatron said to Optimus Prime as he shot him repeatedly (and fatally) while using Hot Rod as a shield: "FALL! FALL!"

The smart money will short this shit into the ground. Snapchat has fewer opportunities to generate revenue than fucking Twitter does.

Re:Thirty-Three Billion

[misxn]

I'd short it if I had any idea when the bubble would burst. You need to time it just right, and I'm just not good at predicting when wall street will come to their senses on these sorts of tech bubble stocks.

Just buy some long term PUTS and you'll be fine. No need to predict much there. Just sit and wait. (don't use margin)

Re:I really wonder sometimes..

[JaredOfEuropa]

Social media operators are not technology companies. They are advertising agencies and marketing data processors. Your understanding of technology is not going to help you assess the worth of these companies or the risk of investing in them.

Could be another Twitter or even worse

[Zontar_Thing_From_Ve]

Twitter is currently trading within two dollars of its 52 week low as concerns mount that it may not ever be profitable. I don't use Snapchat. I have nothing against it, but I have no use for it. I have read recently that all of their competitors do everything that Snapchat does, but they all do it better. Snapchat was just there first. I'm sure that some people will make money on this stock. Those who got in close to the IPO opening price may have already sold it off for a profit. The investment bank that backed the IPO certainly has already made a ton from today's market action. But this is the same market with the same investors who kept SCO alive for years at almost $5 a share in the hopes that it would win its lawsuit so I won't be surprised if Snapchat eventually dies and many of those investors end up taking big losses on it.

Can't believe we're repeating the dotcom bubble

[ErichTheRed]

Back in Dotcom Bubble 1.0 it was "eyeballs" - now it's "engagement". Companies IPOing back then also had no concrete plan on how they were going to make money. This is reminding me of the second phase of the last bubble. First it was VC firms pumping money into anything that involved a web browser, then trying to recover their investments by pumping the companies out to an unsuspecting public. Facebook and Twitter were the first, Snapchat might be a VA Linux or a TheGlobe.com.

The thing that sucks is all the bankruptcy sales won't have any cool servers, storage or network gear since it's all in The Cloud this time around.

Let's party like its 1999...again

[Tangential]

This is crazy. They are losing money and they have no clear runway to working business model. Its like a flashback to 20 years ago. Apparently a whole new generation of investors has to learn all of these lessons for themselves.

Its everywhere

[future assassin]

I went to a night club about a 1 year ago since about 7 years and 80% of the people in there were wearing tight cut off jeans and florescent tshirt and shit that looked liked I was back in high school in the early 90's. New generation just recycle the same shit although I wont mind when those womens low cut jeans come back instead of the current mom bum 90's look.