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Snapchat - $3 Billion Acquisition Offer from Facebook (1 Viewer)

Good for them for holding out. Still don't quite get how they're supposed to make money though. 

I use it pretty often  (mostly sending silly nonsense back and forth within my group of friends)  so I see all the paid content available on the stories page.(seems like 50 percent of it is Kardashian related)But I've never clicked on one. My younger brothers are closer to the target demo and they don't look at that stuff either. 

 
I work in this space, understand the brand pretty well, although I'm not a user, part of my work is to understand all major companies like this.

Hype is strong right now, and I think it is all hype. Wildly overvalued and there will be bag holders. Problem with companies like this is the hype train can ride strong for a while and take this to like $40 in a flash. 

I am paying close attention and waiting for the opportunity to short it.

Furthermore, WhatsApp (owned by FB) launched their Snap features last week. FB isn't a company I would bet against, and the market seems to pay no mind right now with SNAP up 50% since IPO price.

 
James Daulton said:
The owners can't just go out and sell all their stock!  That'd look bad.  $3B was cash money homey!
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Dude...  I'm not going to explain it to you, but you are so far off right now you should really step away from the keyboard for a few days.

 
Joe T said:
Dude...  I'm not going to explain it to you, but you are so far off right now you should really step away from the keyboard for a few days.
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I'm asking you to aware me please.  I've always thought these IPOs came with stipulations like the owners stock couldn't be sold for so long.  That kind of thing.

 
James Daulton said:
I'm asking you to aware me please.  I've always thought these IPOs came with stipulations like the owners stock couldn't be sold for so long.  That kind of thing.
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Not all IPOs are the same. I don't know how this one was setup, but if it was setup such that say 10% of the owners existing stock was being used for the IPO, then they just got nearly $3 billion... and still own 90% of the company. That's just an example. Again I don't know how this one was setup.

 
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...I still don't get what they actually "do" to make $400M/year.  OK, so they sell ads.  So does every other site.  They're trying to be a FB-type IPO, but I fail to see how SnapChat has value anywhere near Facebook.  They don't have the user profile information to leverage for the big marketing bucks, etc. 

 
James Daulton said:
The owners can't just go out and sell all their stock!  That'd look bad.  $3B was cash money homey!
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I don't think the $3B was all in cash. I thought some of it was in Facebook stock when they made the offer. That being said, if true, would be worth much more than the $3B now due to how high FB has gone up. 

 
Fat Nick said:
...I still don't get what they actually "do" to make $400M/year.  OK, so they sell ads.  So does every other site.  They're trying to be a FB-type IPO, but I fail to see how SnapChat has value anywhere near Facebook.  They don't have the user profile information to leverage for the big marketing bucks, etc. 
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Do you use SC?

 
Pretty good day for a Bay Area Catholic school:  Mountain View Private School May Get Windfall With Snapchat Investment

One report by Yahoo Finance says St. Francis bought $15,000 worth of shares early on, which would now be worth tens of millions.

But according to “The information,” a San Francisco based tech news site, the school has a much larger stake.

That website reported the school invested $15.2 million worth of early shares, which would mean the investment is worth $3.2 billion dollars.
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What I really mean is that youth culture, in our culture of all things youth, will always be more dynamic that we expect. 

 
rockaction said:
What I really mean is that youth culture, in our culture of all things youth, will always be more dynamic that we expect. 
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No doubt, but at some point every generation becomes old and sticks with what they are comfortable with. The teens become the young adults and then the people with jobs and cash to spend. It's less about capturing the youth for the sake of capturing the youth as much as it is about capturing the youth so you can milk them later when they got cash. 

 
Ilov80s said:
No doubt, but at some point every generation becomes old and sticks with what they are comfortable with. The teens become the young adults and then the people with jobs and cash to spend. It's less about capturing the youth for the sake of capturing the youth as much as it is about capturing the youth so you can milk them later when they got cash. 
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Yep. Certainly. Totally agree.  

 
Ilov80s said:
No doubt, but at some point every generation becomes old and sticks with what they are comfortable with. The teens become the young adults and then the people with jobs and cash to spend. It's less about capturing the youth for the sake of capturing the youth as much as it is about capturing the youth so you can milk them later when they got cash. 
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Worked for MySpace!

 
Biggest challenge is Facebook is coming out with s direct competitor since they didn't buy this.

thats going to be a lot of headwind for them.

 
Analysis from a few weeks back on Stratechery on Snapchat.

Conclusion: 

So will Snap succeed?

The trouble for the company is that some of the conditions necessary for its success are out of its hands: on a macro level, the timing of The Great Unbundling, an important aspect of advertising moving away from TV, is as uncertain as ever. On a competitive level I suspect Snap is more surprised than anyone at how effectively Facebook has leveraged Instagram to foreclose Snapchat’s growth.

I do, though, have faith in Snap itself: Spiegel and team are the most innovative in tech, brilliantly laddering up to new opportunities, and creating new markets. The products will be great; we’ve known for 30 years, though, that that is not always enough.
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bagger said:
Biggest challenge is Facebook is coming out with s direct competitor since they didn't buy this.

thats going to be a lot of headwind for them.
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The biggest issue is that technology is changing and what Snap and Facebook are currently working towards is a future of mixed and augmented reality, and communicating in that world.  Microsoft is, Apple will be, the industry is moving quickly in that direction.

Snap has entered the world of glasses and camera and made it stylish.  So far, Facebook has not...but they have the Oculus.  A huge change is coming to technology and how folks use it and interact with the world around us, and depending on who is nimble enough to capture the audience as it shifts from traditional media to AR, there will be hundreds of billions to be made here.  

 
adonis said:
The biggest issue is that technology is changing and what Snap and Facebook are currently working towards is a future of mixed and augmented reality, and communicating in that world.  Microsoft is, Apple will be, the industry is moving quickly in that direction.

Snap has entered the world of glasses and camera and made it stylish.  So far, Facebook has not...but they have the Oculus.  A huge change is coming to technology and how folks use it and interact with the world around us, and depending on who is nimble enough to capture the audience as it shifts from traditional media to AR, there will be hundreds of billions to be made here.  
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Maybe, but not by snap chat.

 
Ilov80s said:
Damn, wish I followed the stocks. SC was a no brainer. The entire next generation is on there. 
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No need to worry my little friend.   You're likely not getting any stock at issue price ($17) unless you're a major institutional investor.  

 
Major said:
No need to worry my little friend.   You're likely not getting any stock at issue price ($17) unless you're a major institutional investor.  
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I don't invest in individual stocks anyway, was more of just a comment on a perceived value.

 
Why are people giving Ilov80s ####? He's one of the best commenters on the board. 

 
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Alright, so I threw a few thousand in yestersay @ $24, was planning on getting out at $30 but what does everyone else think? It's just over $27 now.

10 minutes later, over $28

 
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Ilov80s said:
Do you use SC?
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I downloaded it for a little while.  I found the filters novel (my 2.5 year old son LOVES the doggy face one), but honestly I don't communicate with people enough to bother, so it got purged a while back.

My wife and her sisters are religious users of it - but I can say with confidence that none of them have ever spent a dime on anything via the app.  It's essentially a free app to them.  I asked my wife why it's such a big deal, and she just said, "It lets you send texts and pictures without having to save them and fill up space on your phone."  :shrug:   It's kind of like why I don't understand why you need Instagram AND Facebook...you can post pictures to Facebook, so why Instagram?  Maybe I'm just getting old...

 
Major said:
No need to worry my little friend.   You're likely not getting any stock at issue price ($17) unless you're a major institutional investor.  
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This - I worked in investment banking for 3 years.  I was a very low-level broker and never got any IPO  allocations for my clients.  None.  My FIL is a Sr. VP at Morgan Stanley, and even he rarely gets IPO shares to allot. 

The only time I ever had the chance to get them was when my current company IPO'ed a few years back.  I loaded up.  Basically, unless you're a BIG fish with a broker with a lot of pull, or an employee, your chances of getting enough of a hot IPO to make any substantial money is pretty slim.  Not saying it won't happen, but IPO's of hot companies are about as close to "sure money" as you can get short-term.  There aren't many people in investment banking who will pass that kind of guaranteed profit down to the average guy.

 
-OZ- said:
Alright, so I threw a few thousand in yestersay @ $24, was planning on getting out at $30 but what does everyone else think? It's just over $27 now.

10 minutes later, over $28
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Personally, I'd get out at $28 (17% return).

But it really depends on you and what you think of the company long term. This could be a juggernaut that is $75 in a few years or a turd that fizzles out. Up to you. 

 
eoMMan said:
Personally, I'd get out at $28 (17% return).

But it really depends on you and what you think of the company long term. This could be a juggernaut that is $75 in a few years or a turd that fizzles out. Up to you. 
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I put a stop on it at $27.75 (limit atb $30) but that appears to not have processed.   

 
Fat Nick said:
I downloaded it for a little while.  I found the filters novel (my 2.5 year old son LOVES the doggy face one), but honestly I don't communicate with people enough to bother, so it got purged a while back.

My wife and her sisters are religious users of it - but I can say with confidence that none of them have ever spent a dime on anything via the app.  It's essentially a free app to them.  I asked my wife why it's such a big deal, and she just said, "It lets you send texts and pictures without having to save them and fill up space on your phone."  :shrug:   It's kind of like why I don't understand why you need Instagram AND Facebook...you can post pictures to Facebook, so why Instagram?  Maybe I'm just getting old...
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they can't spend a dime because there is nothing to buy on there, it is 100% a free app much like facebook. The key being that the pic disappears once it's opened by the recipient, making it very popular among teens and young adults that like to send ### and **** pics.

 
CGRdrJoe said:
they can't spend a dime because there is nothing to buy on there, it is 100% a free app much like facebook. The key being that the pic disappears once it's opened by the recipient, making it very popular among teens and young adults that like to send ### and **** pics.
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I've never received a ##### pic nor sent a #### pic.  My life is so incomplete.   :(

 
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