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<h1 style="text-align: center;">SNAP IPO</h1>
<h2>[WHAT]</h2>
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<li>] by Alex Barinka &nbsp;and Sarah Frier @bloomberg.com - synopsis of events from 2017-03-02 IPO of SNAP, the parent company of mobile app Snapchat. &nbsp;</li>
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<h2>[WHY]</h2>
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<li>] Snap ended the day at 24.48, a 44% increase on its 17 IPO price.&nbsp;</li>
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<h2>[WHERE]</h2>
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<li><strong>] READ THE FULL ARTICLE</strong></li>
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<li>] <a href="https://www.bloomberg.com/news/articles/2017-03-02/snap-opens-at-24-a-share-well-above-the-17-dollar-offer-price" target="_blank">https://www.bloomberg.com/news/articles/2017-03-02/snap-opens-at-24-a-share-well-above-the-17-dollar-offer-price</a></li>
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<h2>[WHEN]</h2>
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<li>] 2017-03-02</li>
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<h2>[EXAMPLE]</h2>
<p>Snap sold 200 million shares in its IPO at $17 each, above the $14 to $16 marketed range. Its market valuation at the IPO price, of about $20 billion, implies a multiple of about 21.4 times EMarketer&rsquo;s estimate for Snap&rsquo;s 2017 advertising sales. Snap went public at a valuation at least twice as expensive as Facebook Inc., and four times more costly than Twitter Inc.</p>
<p>Snap ended the day at 24.48, a 44% increase on its 17 IPO price.&nbsp;</p>
<p>&ldquo;Snap presents investors with the opportunity to invest in the company behind an innovative, large-scale, and distinctively young-skewing platform,&rdquo; said Brian Wieser, an analyst at Pivotal Research Group LLC. &ldquo;Unfortunately, it is significantly overvalued given the likely scale of its long-term opportunity and the risks associated with executing against that opportunity.&rdquo; He gives Snap a sell rating.</p>
<p>&ldquo;There is a huge amount of people who really just want to get in on the hot new thing, who see this as the first opportunity of its type in a number of years,&rdquo; David Kirkpatrick, chief executive officer of Techonomy Media, said in an interview on Bloomberg TV. Still, &ldquo;they&rsquo;ve got some serious work to do to actually make a real business that makes profits.&rdquo;</p>
<p>The company also needs to convince investors to put their complete trust in its management: It listed non-voting shares, the first company to do so in the U.S., according to its deal filing. That means stockholders will have no sway over things like director nominations and executive compensation, and they won&rsquo;t be able to bring matters before the annual meeting. Co-founders and majority holders Spiegel and Murphy will be responsible for the decisions that lead to Snap&rsquo;s success -- or on the hook for its mistakes.</p>
<h2>[HOW-TO]</h2>
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<li>]</li>
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<h2>[REFERENCE]</h2>
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<li>] SRC = best-of-HN-2017-03-02, (217)<a href="https://news.ycombinator.com/item?id=13775348" target="_blank">comments</a>(288)</li>
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<h2>[RELATED]</h2>
<div><ol>
<li>] moment# 001 - #snapchatIPO&nbsp;</li>
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<h1 style="text-align: center;">comment mine</h1>
<p style="text-align: left;"><strong>]&nbsp;https://news.ycombinator.com/user?id=chollida1</strong></p>
<p style="text-align: left;">So now we know that there is atleast some appetite for shares with no controlling interest and no indication of paying out a dividend any time soon. A current market cap of 30 Billion is a pretty darn big accomplishment!</p>
<p style="text-align: left;">Two big dates in the future to look out for.......</p>
<p style="text-align: left;">1) July 30 when the first lockup date is over. I'm not sure how many shares come off restriction.</p>
<p style="text-align: left;">2) May 15 when they do their first earnings report.</p>
<p style="text-align: left;">I'm interested to see if they try and make people view the company via GAAP accounting(PnL) or non GAAP measures like engagement, monthly users, etc.&nbsp;</p>
<p style="text-align: left;"><strong>&gt; ] https://news.ycombinator.com/user?id=ChuckMcM</strong></p>
<p>They had a pretty large participating contribution (50M shares as I recall) so that is a bunch of money that paid off some folks who might have been skittish.</p>
<p>I was surprised to see as large a bounce as there was. And it has no doubt realigned the world view of a bunch of Snapchat employees[1].</p>
<p>To your last point I can't imagine they are going to talk earnings in a GAAP context unless they are generating lots of free cash flow as Google does.</p>
<p style="text-align: left;">[1] If you're an employee and reading this and thinking "I'm rich! Quick go buy a Lamborghini!" I caution you to wait until you've not only exercised the shares and paid tax on them, but you have sold the shares and that sale has 'settled' and you have the money in your brokerage account.</p>
<p style="text-align: left;">&gt;&gt;</p>
<p style="text-align: left;">The s1 listed 50m shares as coming from existing share holders but they did not break it out. Usually that is employees with vested shares and occasionally other investors. Was more common in the dot com IPO's but Zynga did that too as I recall</p>
<p style="text-align: left;"><strong>https://news.ycombinator.com/user?id=InternetUser</strong></p>
<p>And that's not their only product:</p>
<p><strong>Bitmoji</strong> has been the #1 iPhone app overall since January 11, and it was already the #1 iPhone Utility app since July 22, 2016 (Log in to see) -</p>
<p>https://www.appannie.com/apps/ios/app/bitmoji-keyboard-your-...</p>
<p>https://www.appannie.com/apps/ios/top/united-states/overall/...</p>
<p>And yesterday on eBay, 22 pairs of <strong>Spectacles</strong> were sold, with one pair went for $229 and 2 others went for $200 each, even though http://www.spectacles.com has been offering them for $130 since last Monday -</p>
<p>http://www.ebay.com/sch/i.html?LH_Complete=1&amp;LH_Sold=1&amp;_from...</p>
<p>Then there is the <strong>rumored Android Snap Phone:</strong></p>
<p>http://mashable.com/2017/02/14/snapchat-phone-concept-design...</p>
<p>And <strong>Snap Drones</strong>, as reported on page 2 of today's NYTimes -</p>
<p>https://www.nytimes.com/2017/02/28/technology/snapchat-drone...</p>
<p>http://i.imgur.com/6Nl0Ymq.jpg</p>
<p style="text-align: left;"><strong>&nbsp;https://news.ycombinator.com/user?id=probe</strong></p>
<p style="text-align: left;">&nbsp;The SNAP thesis I like the best is - "Twitter-like growth with FB ARPU".</p>
<p>The monetization potential of this company is massive (geofilters, sponsored content, hardware with spectacles, etc.) and there's no direct comp for that. Pokemon Go showed us the bleeding of digital to physical, and Snap has the potential to be the first company to unlock value from it (ex. geofilters). Plus you can view SNAP as a call option on AR and their potential to be the main camera (when something exciting happens, which app do you open first? For at least in my social circle its by far Snapchat not the Camera app/twitter/etc).</p>
<p>That being said, they face a massive threat from Instagram Stories and now WhatsApp Stories. Though a caveat - while their DAU growth has slowed, it's actually been in international markets primarily (and I think wrongly they don't care enough about dealing with low-bandwith, "unexciting" users). If they can keep a healthy growth in US to escape the FB threat they can afford to lose internationally.</p>
<p>Their first 1-2 earning report will be very revealing for SNAP b/c the expectations have been set and I'm looking for them to do the following: 1) Raise ARPU at similar rates 2) Maintain healthy DAU growth in the US 3) Create new product innovation around AR/Spectacles/Lenses.</p>
<p>If they don't hit at least one of those goals (and preferably two or all three), than I would be very concerned for them.</p>
<p style="text-align: left;">&nbsp;</p>

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