Why place an over one year old alleged offer in the media today?
Because the shares are free-falling, user growth quarter-over-quarter will likely be abysmal and float will drastically increase in 2 weeks.
The only possible sliver of hope for shareholders right now is a potential buyout. Remember how many times Twitter rallied on 'chatter' of a Google bid?
Edit: interesting number of down votes, is this such a far fetched conspiracy theory? If it was such an open secret at Snap, why has this not come out yet?
Yep. I feel like it's time to manually make a list of egregious submarine launchers, though it seems that it's journalists who's coverage is over a limited set of companies such as social media that are prone to doing things like this.
It feels like there should be a filter that considers who owns a paper, who the journalist has previously covered in depth, and what kinds of stories they're printing. Maybe something like a shill or hater score?
I'm not sure how easy this would be. Does anyone know if something like this exists?
Pick a reporter from any outlet and manually perform the analysis that you've suggested and I think you'll see that it is not easily computational. Even basic taxonomy of "kinds of stories" is not well implemented on a service such as Google News.
You'll also find that almost all reporters do the things you don't like. It's a mostly-inevitable consequence of the system of incentives and constraints that apply to almost all reporters.
Why will that make a difference? By knowing what a baseball players salary is and who he plays for today do you magically influence what his salary is and who he plays for tomorrow?
These things are way abv the paygrades of anyone sitting around here.
It's all journalists. It's all media. Some are for sure outright corrupt but it's just part of the job.
> I'm not sure how easy this would be. Does anyone know if something like this exists?
Don't know of any such thing that exists today. But it shouldn't be that difficult. A simple database linking journalists, news organizations, to topics/companies/keywords/etc.
All orgs with a PR dept have a list and a rate card. It's not like this info doesn't exist. It's just that the general public can't do jack about it. It's like knowing the salaries of baseball players and what team they are on. General public has zero influence on that. The only people who have influence on these things is people who can buy the whole team and set an agenda.
Or perhaps someone who was subject to a 6 month lockup is pissed. Evan's a billionaire so nothing matters either way, but if you're not as high up, a 100% difference could be pretty material to your life.
It's worse than that, because your basis is not anywhere near $0 unless you're Evan and his bros. If you're an engineer who has worked there for 2-3 years you are probably getting near (or already below) your strike.
That said, if you're an insider still, you probably feel it's going to get better, so you hold. You're used to shares being illiquid and it's easy to continue seeing them as such. Plus, you get some bonus cash with follow-on RSU grants that are certainly being doled out.
I read that most employees have a strike price above $15. I think this is an unmitigated disaster for employees, especially with the vote structure etc prohibiting the board or any major investor taking influence.
I personally would probably recommend to cut losses and run - it looks more like Groupon, Gopro or Twitter right now than anything else.
Who is to blame? CEO and underwriters for overpricing their IPO? To me it looks like Snap was simply strangled by Instagram in the worst moment. The last private round was priced when it still looked like Snap would continue growing explosively, IPO was hence massively overpriced and employee options as well.
It probably is not helping company moral right now that the CEO gave himself an $800 million bonus for the IPO.
[rhetorical question] How is it possible that a company has tens of millions of users, IPOs, and the common stock is worthless? That's basically theft from your employees. Any early employee at a company as successful as Snap should be making a small fortune in stock options.
The common stock isn't "worthless", it's the stock options to later-stage employees that are possibly worthless, or at least worth less than imagined. The lesson here is to never rush to judgement about the value of your options at a startup. You need to think about "how much more will the company be worth when I exercise vs how much it was worth when I joined", vs the less meaningful "I have XXX dollars worth of options".
And yes, I am aware of the inherent discount for ISOs, so as an employee you still stand to make about 2/3rds the value of your options if the company is worth about as much as it was when you joined. This makes me a little suspect of the stated $15 strike price for ISOs, that doesn't sound like the typical 2/3 discount unless if the stock was privately worth $30-45/share at grant time.
[rhetorical answer] By offloading as much economic risk as possible on to producers with the least means of asserting corrective action in case of inequitable decision making.
(In other words pass losses on to employees and guarantee [as much as possible] returns to investors despite risks.)
This would be a very odd way of going about trying to sell the company by saying that someone was going to by it for 2x what it is presently worth ... so why not buy this falling knife right now!
It sounds like they were just internal rumors that spread around and then eventually got to a journalist.
Unless the internal sources directly and verifiably worked on drafting the proposal or discussing the concrete deal being purported - it's most likely inaccurate, overly optimistic hearsay.
Let's use our best judgement here and not humor the journalist for clicks and outrage.
Even if the rumors were true, it's meaningless. Every business the size of Google has a list of potential acquisition targets. (There was a leak of one such list from Amazon or Microsoft, I believe.) "Interest" and "intention" are two separate things, and the latter counts for a lot more.
True or not, Google clearly needed yet another messaging service, which they in about a year's time would have messed up and deprecated.
How about they just unify what they already have on offer, and get it working properly (and maybe worldwide this time!) before messing with yet another service?
True or not, Google clearly needed yet another messaging service, which they in about a year's time would have messed up and deprecated.
Exactly. It's almost been a year since Allo was released, which means we are due for an announcement of a new messaging app from Google. Likely something that combines Allo and Duo into a single app, and call it something like Trio.
Of course, when they inevitably split "Trio" into separate apps a year after release, they won't be able to stick with the same name convention.
Forget Duo and Allo, they are still splitting and combining Google Hangouts! I remember when they combined SMS into Google Hangouts it was game changer for me but just recently I got notified that they are splitting out SMS functionality out of Google Hangouts...
I think Google's fragmented approach to messaging is hilarious but what's the harm in approaching messaging from different angles and apps? Why not keep at it as startups would, but throwing things at the wall and seeing what sticks?
I think the biggest problem are discovery and execution. Take the basic problem: How do I know which of my contacts I can contact where?
Google already had a unified account system, which covers a huge portion of the internet-using world: Google-accounts. It would be perfect for discovery and tying things together neatly with what they already have to offer.
If a contact your are chatting with in "Hangouts" (formerly Google talk and before that gchat?) also was using Duo on his phone... Google could show an icon for Due and offer a video-call to this person. If both systems used the same ID.
Instead they chose to create entirely new login systems and identities for their new IM systems. This needless fragmentation means I don't know which of my contacts are available on which of the many google-provided IM-services.
Some small changes here could really have significantly lowered the pain involved, and made all these different apps tie together in a way which would have been useful.
Now we just have a mess, getting worse every year, and I now refuse to use any of them for it.
Because this is honestly a really hard problem. There honestly just not really a good way of combining accounts without lots of manual effort on the part of the user. Users also largely don't want this. When Google combined Gmail and Youtube accounts it was just a god awful clusterfuck that required a lot of manual intervention for each user to get their stuff back in order. It also was a net negative because people didn't want their email/google+ tied to their anonymous youtube accounts.
Well I think there was no need to have separate accounts to begin with. YouTube and Gmail had different accounts because YouTube was a separate company.
I think having the option for separate accounts would have been best.
I try not to post anything on Youtube or favourite videos or anything because it's tied to my "real" Google identity which is very traceable to me.
For the same reason I try not to link my Facebook or Google accounts to games and stuff I can help it (though I've mostly given up).
I did have a "fake" Facebook account for lots of stuff that wanted access to my Facebook feed and it's craptacular. Same for Google, but switching accounts for Youtube is a hassle,
Because when you are Google and you depreciate Google Talk for Google Hangouts and add steps to connecting with people you push users like me who don't want to deal with the extras steps toward using Facebook and iMessage for my messaging needs.
Because eventually consumers will start to distrust Google (in the sense that their products won't last). Even in this throw-away society we have today, people don't want that much churn with messaging.
They never put enough effort behind anything to get it to stick. And you can only do that so many times before people are just not interested in what you have to offer because, no matter how good it might be, they're thinking that you're just going to move onto the next thing in a year or so.
Many years ago Microsoft was trying to purchase Yahoo for $45 a share. Every company has their Yahoo moment, where they consider making an over the top purchase offer for a company, that in hind site looks like a terrible idea.
I'm not sure how far the talks went, though given that this is just coming out now, I'm guessing they didn't go very far. Would be interesting to know if the offer is still actually on the table like the article hints at.
This is the price you pay for giving up all voting rights. If Evan doesn't want to sell no sale, no matter how good of an offer is on the table. With voting rights atleast someone can hold the CEO's feet to the fire to make them consider the idea.
At the time, most of the share value was in Yahoo's core business. If this was Microsoft's way to buy a stake in Alibaba, it was a very expensive way to do so.
I'm not Marissa's biggest fan (and have made a few comments here against her), but the spinoff was not her first choice. In fact, there was an original plan that would have spun off Alibaba and a small part of Yahoo (Yahoo Small Business, I think) and kept the core business going. Activist investors weren't very receiving of that idea though.
Jerry Yang made a magnificent bet... one of the best investments ever in Alibaba. I don't think he's received enough credit even as Yahoo has been wound down.
I don't think they had a choice. I think Marissa tried her hardest to save the company. after some amount of time activist investors started to get in the way, and push an Alibaba sale.
The reason they don't stop is that sometimes, rarely, the ridiculous acquisition is in fact a really, really good idea. Ten years ago, Google acquired YouTube for $1.6 billion. That was a Good Idea.
It's hard to believe people still bring this up when the reality is that it would have been a very successful acquisition for Microsoft had they actually purchased Yahoo.
> Many years ago Microsoft was trying to purchase Yahoo for $45 a share. Every company has their Yahoo moment, where they consider making an over the top purchase offer for a company, that in hind site looks like a terrible idea.
That bid was terrible for YHOO shareholders. You do realize YHOO owned a ton of alibaba stock and yahoo!japan stock right? The alibaba shares alone that yahoo owned is now worth more than the $45 billion offer by MSFT. That's after Mayer foolishly sold off a huge chunk of alibaba shares a few years ago to go on her buying spree.
If steve ballmer had managed to buy YHOO, it would have been one of the greatest deals in history.
YHOO owned 25% of alibaba ( which is worth about $400 billion today ). YHOO also owned Yahoo!Japan which was worth $10 billion.
If MSFT bought YHOO back then, we would be calling Steve Ballmer and MSFT a genius today.
I'll agree with you. I strongly believe instagram is taking over snaptchat. All of my friends switched to instagram from snaptchat. Some of them will still post on both instagram and snaptchat but it feels like they keep posting on snaptchat until their last set of contacts move from snaptchat to instagram itself.
I do believe that the people working for snaptchat are trying their best, and they are innovative etc, its just seems that instagram itself has become the new hip and its seriously competing with snaptchat.
It's interesting how Facebook has such a keen eye to spot the next pivot and move their giant ship inch by inch methodically in the right direction. They did it with newsfeed for the main site, main site to mobile transition(albeit with the html5 fiasco thrown in for a year), carving out messenger(and pivoting it to another screen to show ads) and now pivoting Instagram to subsume Snapchat.
Kinda how Netflix vs HBO is a question of - how fast can Netflix become HBO before HBO becomes Netflix. Instagram is definitely trying their best to have part of its identity be Snapchat. What is Snapchat trying to become rapidly before Instagram subsumes Snapchat? The walls are closing in fast(like it happened with Twitter) and if they don't figure out the answer soon they will suffer the same fate.
Facebook's strategy certainly has worked so far, but I doubt it's sustainable. Every time Instagram copies a Snapchat feature it is a pivot from their original vision. Unless Snapchat starts copying Instagram, over time the two will diverge, one is a focused and coherent product, the other becomes a feature laden beast.
Also internally I can't imagine how the Instagram engineers feel about their roadmap being "continue to copy and shoehorn Snapchat features into our app".
> Why be the next Instagram when you can be the next GroupOn?
That's an unfair comparison imo.
Snapchat have bought an AI company in Eastern Europe that does those cat and dog filter on people.
Groupon was very easy to emulate, I don't think Snapchat is as easy as Groupon. The infrastructures to set up Snapchat and those AI filters and such is a bit harder.
They have enough tough-to-emulate problems to continue to be ahead of copy cats while continue to keep innovating and keep that rift.
Snap problem is making money now but that's the same with Twitter, Facebook (initially), Foursquare, etc...
I'm optimistic that they'll start making profit not sure if it'll be enough to satisfy their investor (e.g. twitter) but they will.
Could the investors/founders have cashed out as easily (or for more money) through this type of acquisition vs an IPO?
That's basically the only relevant question here. I doubt Snap would have been a better consumer product under Google's direction. They have a consistent habit of killing them off.
This high value only because facebook bought whatsapp for almost $19 billion. Google offered $10b for whatsapp. They gave up for anything beyond it thinking it is too much only to realize later it was not.
Whatsapp is probably much more valuable to Facebook than to anyone else.
Could Google really significantly monetize Whatsapp? It seems Facebook can't - but at least Facebook can ensure their other revenue streams aren't decimated by free-and-fast Whatsapp.
Well, SNAP is currently trading for $15 billion. If they can get $20 to $22.5 billion for the company right now in an acquisition by eg Google, they should immediately take it.
Twitter is the picture of where they're going, best case scenario (the difference in risk of course being, Instagram isn't a serious threat to Twitter's existence). Twitter has four times the sales (annualized run-rate), more cash, a lower quarterly burn rate (now), with 23% less market cap.
Well i think you have never used snapchat. Everyone in this thread are not all accounted in the TAM for snapchat. Before concluding that they should sell or not, i recommend people to use snapchat for six months.
Snapchat is a product which provides delightful experiences to communicate with your friends where you can express yourself as the way you are, instead of waiting for a trophy moment.
Well, SNAP DAP > TWTR DAP,
TWTR Average time spent per day: 1-2 minutes
SNAP Average time spent per day: 30-35 minutes. So SNAP has 30X potential than dead twitter with no product innovation.
Yeah, and Google also reportedly offered to buy Groupon for $7 billion, a year before it went public. Not sure what kind of consolation that gives to shareholders now...
Hah agreed. I bet it wouldn't pass DD tho. SEC was not stoked about the way they booked revenue considering the % that went right out the door to coupon vendors.
Yea, people said the same thing about Digg. TBH Google is probably interested in buying anything remotely social. Digg had the reason of not accepting their corporate "culture". Either that or Google figures out that they just have to wait and hire the CEO once the company fails (this happened to Digg).
Disclaimer: I have a small amount of Snapchat shares.
Every time I interact with any sub-21 year old person, I ask them 2 questions:
1.What's the most popular social network among your group of friends? I'd estimate 7-9/10 say Snapchat. If it is Snapchat, I proceed with question 2.
2.Do you read/interact with the "Discover" section of Snapchat? (Because this is where I think Snapchat has the most potential to actually make money.) I'd say 5-7/10 say Yes.
As a 21 year old, the way I see it right now is Snapchat is used for more private photos (not that kind, but more for friends to see) and Instagram is used for photos that people wouldn't mind being seen by anyone.
A lot of people post everything to both, but Instagram usage has massively increased over the last few months.
Snapchat is still my go-to, but I've been peer pressured into posting Insta Stories as everyone else is now there.
Edit: Oh and I never use the Discovery page, neither do my friends. It's annoying and mostly useless.
> Every time I interact with any sub-21 year old person, I ask them 2 questions
You sound like a fun person - JK. But among my conservative, Midwestern sub-21 family and acquaintances, the answer was surging to Snapchat around Christmas. Then they moved lifestyle posts to Instagram, and moved communication/socializing back to Facebook. Also, they don't often interact intentionally with the Discover section.
Yes, with all the gamification, many of them can't quit. What the problem is that kids don't have much money to pay for anything. So, if you make a product for kids, make sure it is something their parents will pay for. Snapchat is not one of them.
This is so wrong at many levels. The reason why apps and companies are focussed in getting the 16-22 year olds are
1. They have very high power in changing their parents purchases.
2. Their word of mouth power is exponential compared to a guy who is 30 years old working in corporation.
3. 16-22 year olds are going to become 20-28 year olds in 4 years which is a real threat to facebook. This generation doesn't want to be part of Facebook.
I feel like it's ultimately doomed in the face of Instagram, but I still see younger people using it often. I'm not sure how much that means though, many popular things from when I was young, like MySpace, are dead.
The Snap "streaks" or whatever was a smart engagement feature. But it could turn into a double edged sword- once you break the streak you might as well keep it broken.
Why place an over one year old alleged offer in the media today?
Because the shares are free-falling, user growth quarter-over-quarter will likely be abysmal and float will drastically increase in 2 weeks.
The only possible sliver of hope for shareholders right now is a potential buyout. Remember how many times Twitter rallied on 'chatter' of a Google bid?
https://www.theguardian.com/technology/2015/apr/08/twitter-s...
https://www.cnet.com/uk/news/twitter-buyout-rumors-google-sa...
Edit: interesting number of down votes, is this such a far fetched conspiracy theory? If it was such an open secret at Snap, why has this not come out yet?