Reminds me of Facebook IPO, a lot of people were claiming it will plunge and eventually go bankrupt. But companies with such big daily active audience that can be targeted with ads are here to stay.
Considering it went smoothly it doesn't remind me of Facebook's IPO at all. Twitter should be all the evidence you need of how hard it is to succeed selling advertising to a big audience. Snap might crush it, but I would give them a few earnings reports before comparing them to anyone.
No, it was a disaster that led to years of litigation. NASDAQ admitted it was their technical error and paid millions to settle lawsuits stemming from it.
This obsession by techies that you're leaving money on the table if your shares go up after an IPO is bizarre.
> This obsession by techies that you're leaving money on the table if your shares go up after an IPO is bizarre.
If the company gets $X/share at the beginning of the day, and bankers get $X * 1.5/share at the end of the day, that feels like a big donation to Wall Street. If I'm an investor, I'd rather the company have all the capital than 2/3rds of the capital as well. It feels like if a company would sell a portion of the offering through the traditional channels, and the remainder at market prices throughout the first couple days of trading, it might better capture investment.
It priced 2 or 3 billion dollars over the early valuation estimates (a few weeks before the $38 debut, the roadshow was floating $32 as the top number).
EDIT: I was wrong, that's just what they are selling today, not the total value of their shares. In which case, good for them!
It actually surprised me how little the founders got. Their shares are worth about $400M each. Certainly nothing to sneeze at, but usually when you're the cofounder of a 24 billion dollar company, you're a billionaire. :)
> According to Snap's latest S-1 filing with the SEC from Feb. 27, Spiegel and Murphy plan to sell 16 million shares each on Thursday. The company opened at $24, after it priced its public offering at $17 a share. It's just a small fraction of the number of shares the co-founders own in Snap Inc. Both men will still have 97,164,485 after Thursday's sale.
Oh I read the same article but I read it wrong. I thought they meant that would be the total value of the shares they hold after the IPO, not just what they are selling today. My bad.
Groupon was a totally different business. Network effect didn't really add anything or give them lock in. Customers and businesses would go wherever prices were lowest. It was always doomed, really.
>> But companies with such big daily active audience that can be targeted with ads are here to stay.
That's just it. Snapchat has very little targeting data, and targeting is a force multiplier for ads revenue. They don't even have explicit gender data.
Edit: Downvote all you want. They don't ask the users for gender. It's implied. See Twitter for a similar tactic.
How is that powerful? Any mobile app has geolocation data. How is that a market differentiator? That's like saying they have mobile OS targeting... So?
Few other apps that I'm aware of provide live advertisements for events happening nearby as part of your natural use of the app in a really noninvasive way, and provide incentive to share those advertisements.
Snapchat geofilters are non-invasive and will be seen in normal app use, but don't really bother you. They can inform you of events happening nearby or, if you're at an event, you can use the geofilter when snapping, which shows your friends that you endorse the event/product/whatever, in a totally transparent, opt-in way. That's super powerful.
Well the major difference between the two is that Facebook can engage grandma as well as junior. It has broad cross-generational appeal. The whole point of Snapchat is "mom and dad don't use it" which means they're beholden to the whims of a very young audience. Which I guess is good, since young people aren't known to move on to the next big thing at the drop of a hat.
> since young people aren't known to move on to the next big thing at the drop of a hat.
I'm assuming that was said with a whole lot of sarcasm? In my opinion, that will be the death of Snap - something else new and shiny will come along in a year or two and Snap will be a ghost town.
I'm not a banker so maybe I'm missing something, but I wouldn't be too happy if my company popped after the IPO. The way I see it, that just means that I left money on the table.
If anything, this increases my respect for Zuckerberg and team.
I'm not really excited about the prospect of bankers lining their favored clients' pockets with my money.
It's not uncommon to sell your personal shares in the IPO.
Even if you don't sell your own shares, selling 10% of the company at $5 billion (no pop) is strictly better than selling 10% of the company at $3 billion (assuming a 60% pop to $5 billion). The company has more money and you own the same portion of the company.
And yesterday on eBay, 22 pairs of Spectacles 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 -
