Snap Inc, formerly Snapchat Inc, is a camera company. The company`s flagship product, Snapchat, is a camera application that helps people to communicate through short videos and images as a Snap.
As of December 31, 2016, on an average, 158 million people used Snapchat every day to Snap with family, watch Stories from friends, see events from around the world, and explore curated content from publishers.
The market cap of Snap has fallen dramatically from about $30 billion to $20 billion.
Many investors are now concerned about Snaps DAUs. Not only that; Snapchat has a lot of competitors and to understand that you have to see it with marketers glasses. They are a copycat and have much lower margins than their competitors.
Facebook has the same application and makes Snap tools like a «me too» product. What they need now is International growth, but why should people use Snap`s tools in an already developed market?
Advertisers spend their money on Facebook and YouTube because they know it works. If Snap want to compete with them they need to burn some cash. A lot of cash. What they need is to look overseas to grab more teens.
Snap dropped down -3,19% on Tuesday and its valuation is about $20 Billion, trading at 17,31. The stock is back to its IPO price and it’s headed for a cruel summer for Snap. In comparison, Twitter`s market cap is about $12 Billion and I assume you know the rest of that story.
Investors are worried about Snaps competition. Especially from Facebook`s Instagram which is the same kind of its popular features.
Snap opened at $24 on its initial day of trading back in March, but surged 44% by the close. They started the IPO price at $17 and now we are back to the start again. At $17.
Barclays, Citygroup and J.P Morgan have lowered the price target on Snap.
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Ket Garden
Shiny bull 