Tag Archives: Facebook

Snap Inc was a bubble but is now down to a normal level again

Snapchat was a big bubble when it went public in March last year. It went straight up to about $27, but the story has so far been a disaster. The stock has plummeted. It closed at $6,59 after the bell on Wednesday, down -3,37 percent.

Snap is losing money, and they still have negative user growth. Two things investors don`t like at all. The company will report earnings on Thursday 25, and the reported earnings for the same quarter last year was $-0,32.

If we compare Snap with Facebook and Twitter, the company is now down to earth again. But when it comes to popularity, Instagram is more popular among teenagers than Snapchat. A survey found that 85 percent of teens use Instagram at least once a month. 84 percent use Snapchat.

The company have 188 million Daily users and most of them is kids. Snaps CEO Evan Spiegel admitted the company rushed the redesign, and they didnt spend enough time to test the new platform. It all ended up with angry users.

Snaps market capitalization also fell by about $12 billion after a bad ad campaign with Rihanna. She used Facebooks Instagram to complain about the ad with Snap.

Snap need to report a growth in DAU`s to lift the stock again. A decline in their DAU can make the trend to continue. What we know so far is that this stock is very volatile and you can see how the stock jumped in February and June this year.

Snap Inc is expected to report earnings on Thursday 25, 2018, after market close. The report will for the fiscal Quarter ending September 2018. Earnings forecast for the quarter is $-0,27. Better than last years earnings at $-0,32.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Snap`s self-serve ads is finally ready to launch, but the drawback here is sliding ad inventory prices

Snap Inc is set to report second-quarter earnings after the market closes on Tuesday August 7. Historically, the company makes big moves in the wake of its quarterly reports. The average single-day price swing is about 24 percent regardless of direction.

Both Facebook and Twitter faces a challenging time. So do Snap Inc. GDPR pushed Facebook`s user counts down compared with the first quarter and that will also impact Snap Inc. Snap is a small company compared to Facebook, and they will not deal with the same level of scrutiny from lawmakers as Facebook.

EPS in March 2017 came in at -$2,31, but have since then been far better with -$,030 a year later. Analysts on average project Snap second-quarter revenue of $250,4 million, up from $182 million in the same quarter last year.

Facebook have the same tools as Snap and that is hurting their profit. Their biggest competitor is also Instagram which makes it difficult for them to be unique. But Snap launched the second version of its Spectacles product, sunglasses that let people take photos and video and use them within the Snapchat app.

This is also the only move that live up to its claims in the SEC filings that Snap Inc is a camera company.

Snap`s self-serve ads is finally ready to launch, but the drawback here is sliding ad inventory prices. Not good in the short run because Snap have only 191 million DAU`s, an increase of 4 million from the Q4 but below estimates of 194 million.

The company has also struggled with the impact of a product redesign in February that was widely criticized. That didn`t help the stock price that crashed to a record low on May 2 after it reported first-quarter earnings.

They missed views on revenue, user growth and several other key metrics, and analysts slashed price targets. The IPO was held in March 2017, and pricing shares were $17. It went up 2,5 percent on Monday and ended the session at $13,05. The stock is down 11 percent in 2018.

Will Snap Inc take a hit from the implementation of Europe`s GDPR (General Data Protection Regulation)? The same types of issues that led to big declines for Facebook and Twitter.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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The European Union rose “only” 0,4 percent in Q1 of 2018

Last week I talked about America`s fantastic growth of 4,1 percent on quarter in Q2 of 2018, and this is only the beginning. It is no doubt; President Trump must be doing something right. But, what about the European Union?

GDP in the European Union rose «only» 0,4 percent on quarter in the first three months of 2018. Not much to write home about. But the growth have never been above 1 percent since the financial crisis in 2008.

The European Union reached an all time high of 1,30 percent in 1999 and that is right before the tech bubble burst. Since then it has been a dead fish, reaching an all time low of -2,60 percent in the first quarter of 2009.

At the same time we can see that the unemployment rate reached a record low of 6,80 percent in February of 2008, and that`s right before the financial crisis. It reached an all time high of 11 percent in February 2013, but in May this year it fall down to 7 percent again.

This isn`t good enough if we are living in a capitalistic world.

The European Union in Brussels are nothing more than unelected bureaucrats. Draghi and the ECB have, just like Japan and the U.S «printed» a lot of money, and will continue to do so. If they can`t turn around the ship, they need to consider a strong cheerleader.

European Commission President Jean-Claude Juncker had a meeting with President Trump last week. They were talking about trade, free trade and tariffs. Mr Trump`s goal is to make better deals so both the U.S and the EU can take more profit and prosper.

I think that the EU should be glad for that and they need to hurry up. The U.S is the world`s third biggest exporter, yet exports account «only» for 13 percent on GDP. Exports in the U.S reached an all time high of 215328 USD million in May this year, which is pretty impressive.

The EU has 28 member states and the biggest among them all is Germany (21 percent of total GDP), the United Kingdom (15 percent), and France (15 percent).

Exports of goods and services account for 46 percent of GDP while imports account for 42 percent, adding 4 percent of total GDP. But this is about to change. If the UK contribute with 15 percent of the total GDP in the EU, then what will happen to their growth after Brexit?

That being said; nor is the UK a success story. The British economy grew by 0,1 percent in the first three months of 2018 and well below 0,4 percent in the previous period. It is the lowest growth rate since a 0,1 percent contraction in Q4 2012.

The largest contribution to growth in the UK was from household spending at 0,2 percentage points. From the production side, the service industries made the largest contribution to GDP growth, followed by production.

Agriculture, the smallest component within the output approach of GDP made no contribution to growth to one decimal place, while construction deducted from GDP growth. The service industries increased by 0,3 percent.

Positive growth was recorded within all sub-sectors of the services industries; distribution, hotels and restaurants (0,1 percent vs -0,1 percent).

President Trump have repeatedly said that the EU have treated the US very bad. I have written many articles about that long before Mr Trump`s inauguration. The European Commission has fined Google €4,34 billion for breaching EU antitrust rules this month.

In May 2009, Intel was imposed with a 1,06 billion euro fined for abusing its market dominance on central processing units. Microsoft has been in trouble with the Commission on several occasions. In 2004, the Commission ruled that Microsoft had abused its market dominance.

In 208, the Commission fined Microsoft nearly 900 million euros for charging «unreasonable» royalty fees. In 2013, another fine of 561 million euros was imposed on Microsoft. This time for failing to comply with the Commission`s ruling that it had to allow users to more easily choose a prefered web browser.

The European Commission fined Facebook for 110 million euros in May this year in relation to its takeover of WhatsApp. Facebook acquired the messaging service in 2014 for $19 billion, but provided the Commission with misleading information about the acquisition.

In August 2016, the Commission ruled that tech giant Apple had received illegal tax benefits from Ireland worth up to 13 billion euros. Ireland was ordered to recover the unpaid tax from Apple, plus interest.

As early as 1966, British Politician Tony Benn said that «Communism run by commissars from Moscow did not work, and nor will capitalism run by commissioners in Brussels. Both deny people their right to develop in their own way.»

Now, under President Donald Trump, big companies like Apple are moving home to the United States with billions of dollars. Apple alone, are bringing in $230 billion. They will build new plants and a magnificent campus.

They will spend their money wisely and the money will be in the U.S. All this is possible because of Trump`s tax cuts and reforms. This is how you make growth.

 

 

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The king of social media is still Facebook with its 2 billion user base and Snapchat need growth

There is not doubt that the king of social media is still Facebook. But Facebook is not only Facebook. In addition, you have Instagram, WhatsApp and Messenger which means that Facebook accounts for four of world`s largest social media and messaging services.

But what about Snapchat? The stock has declined since it went public and the value of the company is only half of what it was from start. Not only that; Snapchat is far away from its competitors when it comes to MAU`s.

Snapchat has problems. The company is not growing and that will in the long run affect the workers. Some will be frustrated and quit, and that`s the fact right now. The company is laying off employees in one of its most important divisions.

Snap lost high-level executives last year and one of them was Tom Conrad who came from Pandora to join Snap back in March 2016 where he was the music-streaming company`s chief technology officer.

Engineering chief Tim Sehn was resigning the same day that Snap reported dismal third-quarter earnings results. The stock fell more than 5% in one single day when the company announced that their vice president of product is leaving Snap.

On top of that, their competitor Twitter announced they were working on a Snapchat-like video sharing app to compete with Snapchat. Having competitors like Twitter and Facebook with the same core business in a market like it is today is heavy.

So far in their short-lived life, they have faced a lot of challenges. Having executives leaving the company in early stage is one thing, but their redesign has also been negative, and the feedback from their own customers have so far been very negative.

Snaps redesign has made it harder for people to view Stories and that means fewer Snap Ad impressions. Snapchat has «only» 178 million MAUs and thats far away from the social media king. In comparison; Twitter have 330 million MAUs and Pinterest have 200 million.

Snap developed a self-serve platform for buying Snap Ads and that resulted in lower average ad prices. Marketers can now bid what they see as fair value for Snap Ads. At the time when Snap announced the app redesign, Spiegel said, «There is a strong likelihood that the redesign of our application will be disruptive to our business in the short-term.»

Facebook`s giant user base of more than 2 billion enables it to fend off any competition. They continue to expand in North America, Europe and Asia and the rest of the world, so future are still looking bright.

Facebook is set to report fourth-quarter 2017 results on January 31, 2018, and the strength in online and mobile advertising revenues, in addition to expanding Instagram user base will drive top-line and earnings growth.

Snap is expected to report earnings on February 6, 2018 after market close. Earnings forecast for fiscal quarter ending December 2017 is $-0,33.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Snap Inc is in free fall and can end up like Twitter without any usergrowth

The shares of Snap Inc was a success in the beginning of its IPO. Just like many other IPOs. But now, the story is different. Snap Incs stock has seen a big selloff for weeks now, and the price has fallen down to $13,65 after reaching a top of nearly $30 on high volume.

The market cap is $15,99 billion, which means the company has lost about $16 billion of market cap so far. To put that number in perspective: Twitter is worth about $12 billion. GoPro reached nearly $90, but now GoPro stocks is trading at about $10. Snap has lost about 10 GoPro companies. That`s a lot.

 

 

How can Snap survive in a market like it is today? Facebook is the biggest rival and they have more than 2 billion DAU`s while Snap has about 173 million. The question is why people should sign up to Snap when they know they have the same tools on Facebook?

This is what investors are looking for. How many DAU`s is it and are the number rising or declining? Quarterly revenues per user grew per user by 180% during Q1. People spend about 30 minutes vs 25 minutes it highlighted prior to its IPO.

Investors should know that there are a normal situation when an IPO stock is falling like Snap Inc. First of all, it is the lock-up expiration which means about 1,2 billion of Snap stocks will be available for sale in the near future.

Many Snap stocks are owned by VC`s and Executives, but it is a bad sign when insiders are selling their own stocks in their own company. On top of that you have short sellers. This is why Shares of Snap Inc fell about 23% in July. But not only that.

Profits are more important than users and users gives profits. Right now you shouldn`t mearsure the value of the company by users but by profit. If you do that, the stock will fall below $10 and end up similar to Twitter which is having the same problem; user growth.

Snap Inc was a bubble that burst with just 166 million DAUs compared to Instagrams 250 million. It`s funny to see that Snap is worth more than Twitter. How is that possible with only $150 million in revenue for the quarter?

Snap is also burning a lot of cash. They earn $150 million and spend more than $200 million.

Analysts are concerned about Snaps volatile growth and the fact that Snaps insiders would be able to unload some of their shares after a lock-up period expired at the end of July. Snap`s underwriter, Morgan Stanley, downgraded the shares from overweight to equal weight.

Snap Inc is expected to report earnings on Thursday, and investors need impressive results to be convinced about their marketing strategy in the future. A big surprise like that can also stop the negative sentiment at the moment.

Snap Inc will report earnings on 08/10/2017 after market close. Earnings forecast for the quarter is $-0,29 vs $-2,31 in May this year.

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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