IPO Stupidity Continues With SnapChat

Posted by on February 3, 2017 1:39 am
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Keyword: Snap warned that it “may never achieve or maintain profitability.”

Before anything, lets take a look at Chanchat financials

  • Investors expect this offering to value the copany between $20-25 Billion. If you are wondering, that's 8 times Facebook's private offering.
  • Snapchat has 158 million daily active users and 98% of its revenue is derived from advertising.
  • Revenue was $404 million in 2016 and $59 million in 2015. Impressive growth indeed.
  • Net losses grew from $373 million in 2015 to $514 million in 2016.
  • Its global average revenue per user for the three months ended in December 2016 was $1.06, up from 31 cents in the year-earlier period.

Alright, so, as an investor if you decide to partake in this IPO you will be paying about $1,562 per each Snapchat user who may or may not generate $4 in revenue (not net income).

Hmmmm......

I actually have tried Snapchat and I don't get it. So much so that I walked away with an impression that one has to be borderline retarded to use the service. Yet, I would suggest that people who actually participate in this offering might actually be more mentally challenged than the ones who use the service.

If anything, this IPO is yet another indicator that the stock market is in a massive bubble.