Ahead of Snap Inc.’s first earning report this morning, I wanted
to make a prediction. As with every other heavily invested IPO that is solely
tech i.e. Facebook, Twitter, GoPro the earnings from ad revenue and revenue generating
operations is likely to be lackluster and odds are the Snap investors are going
to be disappointed. Later in the blog I want to discuss these tech IPOs with
the build up to where we are at today with Snap. I also want to discuss briefly
the social tech bubble that has been looming the last 5 years.
Snap’s shares have gained 6% over the past few weeks, but
that will likely not reconcile with the first quarter results we are expecting in
the report later today. Revenue decreased
to $158m a bit lower than last quarters yet $165.7m. The March IPO’s was valued
at $27b which was based on an obscene 18 multiple; a risky and lofty
expectation for any investment. The company current strategic future and direction
rests not with investors but with the tech startups founders; which is likely
to bring future tensions. Snap plans to become an advertising and promotion juggernaut,
yet only has 1% of the global digital adverting market.
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