SNAP is a straight-up Ponzi scheme

Pekelo

Pekelo

I had a similarly titled thread 5+ years ago about Groupon, have you used a groupon coupon lately? Nobody has... Or have you seen its chart? It has actually doubled its price from 2.5 to 5.5 in the last 6 months, but before that it dropped 90%, twice. Well, 80% for the second time but what is 10% here or there between friends?

Well, SNAP is a close contender for repeating that price action. Currently down 50% from its after IPO high of $28 back in February. Instead of me boring you, read this appropriately titled article:

Snap is where hype and money go to die

http://www.businessinsider.com/snap-earnings-q3-losses-spectacles-2017-11

Mind you, I don't actually mean SNAP is a ponzi in the Italian stamp arbitrage sense, but it is a failed business model (a la webvan and pets.dom) that won't make money in its current form and it reminds me of the musical chairs game of the stock holders. Who is going to hold the ba... I mean stock, when the music stops or the money runs out, whichever comes first?

Even a huge capital infusion from the Chinese Tencent company didn't help much, it occurs to me they like to invest in ponzis, owning a large chunk of Tesla stocks too. But there is always a silver lining, be it electric semis or Snapchat Spectacles. There are 40 mm worth of those sitting in warehouses waiting to be sold. Maybe they could be given away for Christmas for free...

They are trying to change the trend, on Dec 4th there will be a redesign, you can snap 280 chara... I am sorry, I keep mixing up the ponzis.

http://www.businessinsider.com/snapchat-redesign-planned-for-december-4-2017-11

After this post you might want to ask yourself:

https://gizmodo.com/just-how-fucked-is-snapchat-1820252932

Disclosure: I actually like the Spectacles and probably will buy one on Ebay, because I want to make a family POV video with the wife. For science...
 
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I think Snap is more similar to Twitter than Groupon - engaged user base but difficult to monetize. All the younger people I know use it actively. Since it doesn't actively retain user-generated content, it is more akin to TV advertisement, doesn't have a targeted way to generate specific leads.
 
Yeah, their redesign is a last ditch effort to keep afloat. Might actually be a good buy from here as an all or nothing. In all likelihood they'll drive away their reliable users while failing to capture new ones and tank what cash they have left. But a successful pivot would send it up pretty good. It's a long shot though. For my money I'd buy SQ.
 
Pekelo said:
the money runs out, whichever comes first?
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isn't that the definition of socialism?
"'The problem with socialism is that you eventually run out of other people'smoney." - Margaret Thatcher
in this case venture capital funds, IPOs and secondary offerings
 
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zdreg said:
isn't that the definition of socialism?
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No. It is the definition of socio-capitalism, when angel investors' risk is transferred to public stocks. As Cramer said, this company should have never gone public.

But hey, at least the funder and CEO is doing well, being the youngest and richest billionaire:

http://www.businessinsider.com/stor...el-fabulous-life-snapchat-miranda-kerr-2017-1

"with an estimated net worth of $4 billion, Spiegel, 26, is the youngest self-made billionaire in the world, according to Forbes."
 
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SNAP is a good lesson for everybody.

I mean, at a certain point of time, there has been an institutional investor thinking "hm, its an app and it has a userbase, let's throw some millions at it"

But honestly, how stupid were the people who really thought this has potential? It's an app you can share pictures with...


I tip my hat to the underwriters and all the people who were able to pull off such a scam. If it wasn't Wall Street and big names, a lot of people would end up in jail for straight forward fraud XD
 
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