Tag Archives: Twitter

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.

Advertisements

Leave a comment

Filed under Stocks

Investors are concerned about Snapchat`s future

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.

 

 

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.

Leave a comment

Filed under Stocks

Facebook are dealing with the music industry

Facebook has a lot of DAU`s and more and more people spend time watching videos. Facebook is a young company and so far they already have billions of video views. But Mark Zuckerberg want to prosper from this industry.

There is no doubt that YouTube is the most popular video-sharing company in the world. Many artist has started their carriere at YouTube and one of them is Justin Bieber. In 2016, YouTube gave the music industry $1 billion in ad revenue, and Facebook wants to join.

 

ftv

 

Streaming was a game changer on how media is bought. It changed how it`s consumed. It also changed who profits from it, and of course how much they all made in this industry. For the first time in 20 years, the music industry saw significant revenue growth in 2015.

The revenue from streaming is $2,9 billion world-wide, and revenue from video on demand rose almost 9% in 2015, and music clips can move about $50 – $70 billion from TV industry.

Facebook has nearly 2 billion users and still a growing advertising business, and a deal with the music industry can be a win-win agreement, which means billions in revenue from new sales for the music industry.

The interest in videos is growing and Facebook want to prosper from that, and that’s why they are so interested in music rights. Facebook moved billions in ad revenue from print and now many online firms have targeted TV.

Facebook are not alone on the market and they need to share some of the market with Twitter and Snapchat, but the biggest of them all is YouTube which is Faecbooks main rival. Googles YouTube channel said music is one of the most popular types of videos on their on-demand service.

TV networks and News organizations are experimenting with Facebook, just like they did with YouTube and this will continue. This is interesting because Facebook is big.

Thanks to streaming, the music industry is growing again and that is because of the paid streaming services from Apple and Spotify.

Facebook will probaby sign a deal with the music industry before the summer this year.

 

trump100_b

 

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.

Leave a comment

Filed under Stocks

Will Snapchat be the next Facebook?

Snap is going public. No, I`m not talking about the pop stars with the super hit “I got the power”. This is something different. A different power. But how powerful are Snap Inc actually? Do you really think that Snapchat will be the next Facebook?

Let`s take a closer look at some real facts. I have made a picture of some of the most loved firms in the social media universe, and this time I will compare Snap with Facebook and Twitter. As you can see from the chart below, Snap look more like Twitter than Facebook. Take a look below.

 

 

compared

 

 

As you can see from the chart above, Snaps cost follow Snaps revenue. Its positive to see that their revenue grew from $59 million to $405 million. Thats a whopping 590% over the same time. But the drawback is their high cost structure. Their net operating profit after-tax fell from -$344 million in 2015 to -$498 million in 2016.

You do already here understand that Snap is not the same as Facebooks business model. Revenue goes up while their profit goes down. Snaps valuation is about $20-25 billion, with a revenue of $405 million, and an operating loss of -$520 million.

Facebooks valuation when they went public was much higher with $3,7 billion in revenue, and an operation income of $1,75 billion. Facebooks valuation at that time was $90-105 billion, but as you may know, the stock traded down after the IPO.

You also may know the story of Twitter. Right up, and right down again. Will Snap follow Twitter? Take a look at the numbers. They are very similar. Revenue was $448 million, with an operating loss of -$93 million.

Twitters valuation at that time was $18-25 billion, but people said it was too much. Many investors said the right valuation was half of that; only $10 billion. Snaps trailing sales valuation was 62x, which is about the same as Twitter`s 56x.

Twitter had 100 million DAUs when they went public, while Snap has about 158 million. What is that compared to Facebooks 483? It will be hard to be a new Facebook.

Snap are going public on Thursday.

 

trump100_b

 

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.

Leave a comment

Filed under IPO, Stocks

Microsoft will integrate LinkedIn into Dynamics and Microsoft Office 365

LinkedIn is a small company compared to Facebook, and the stock had fallen out of favor after a cautious outlook earlier this year. The stock plummeted more than 40% in just one single day in February this year.

That was then. Now, the went straight up on good news, and the stock skyrocketed 46% in one day. Investors jumped in on the news on monday. Microsoft announced that it has agreed to acquire the professional networking platform in an all-cash deal worth $26,2 billion.

 

lnkd

 

Microsofts CEO Sataya Nadelia said The deal would «bring toghether the worlds leading professional cloud with the worlds leading professional network», and LinkedIns CEO Jeff Weiner will remain at the helm of the social network.

Microsoft is paying $196 a share for LinkedIn.

What company could be better than LinkedIn in terms of their position and opportunity for growth? The price Microsoft paid was fair, and this acquisition will make LinkedIn more valuable under Microsoft`s umbrella than a standalone company.

Microsoft is still one of the worlds biggest companies, and this acquisition was brilliant. Its not difficult to see what Sataya Nadelia is thinking. He will probably integrate LinkedIn into Microsoft Office 365 and Dynamics.

Marketers and professional networks will still use the platform and integrate it in their sales process. They will be more willing to pay for training and to keep on building marketing campaigns their new CRM.

Microsoft will improve the Dynamics CRM software and Office 365 enterprice offerings, and there is no doubt that Microsoft is interested in more market shares in the CRM business. They want to build out their Customer Relationship Management to compete with Salesforce.

A few weeks ago, Microsoft was the first bidder for Marketo which is part of the automated marketing space. And they have enough cash to buy them all. But they are not interested to spend some cash on this acquisition. They will make a loan to avoid a 35 percent tax bill.

Just like Apple last year. They have $180 billion overseas, but borrowed $6,5 billion to pay shareholders a dividend. We still have low rates, and that`s why we have seen a huge activity in M&A recently.

It would be stupid not to do that.

Many big tech companies have a lot of cash. Alphabet Inc, Apple, Microsoft and Facebook have hundreds of billions of dollars in cash and you can imagine their opportunities in the future. But I must admit it was a surprise that Reid Hoffman sold his «baby» to Bill Gates.

What I expected was to see Twitter in that position. Not LinkedIn. But for all I know, maybe Twitter is the next takeover? It`s beginning to be cheap with a market cap of about $10 billion. If this continue, the share price can drop down to about $5.

Twitter should sell before they are worthless. If Google or other media companies wants the platform, they can have it for almost «free» if they wait any longer.

 

asphalt

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.

Leave a comment

Filed under Stocks