Snapchat: the worst company of all times?

I know I wrote an article on it recently, but I think it’s worth repeating: Snapchat is quite possibly the worst company in the universe. I can’t imagine it staying above $10 as soon as lockup periods expire / people get down their rush. To state that it obtained a $30B valuation is simply beyond insane.

If you wanted to sell me a Snapchat share for $5 and told me I couldn’t sell it for five years, I would refuse.

Snapchat is worthless. There’s no other way to state it: it’s quite possibly the worst company of all times. I spent some time digging through their IPO documents tonight and every single page, I discovered something worse than in the page before. Take their stupid slogan for instance:

It’s a fucking application that allows you to upload photos. That’s it. You take a photo, you upload it and it self-deletes after a few seconds. How exactly do you “reinvent” the camera? How the hell do you even consider yourself a “camera company?”

Anyway, even if you knew nothing about SnapChat, here is the exact moment in the prospectus you should stop reading:

So first problem: Snapchat sold 200 million shares at its IPO. There are 21M shares that are going to be added in the coming years at a price of $2.33 (lol), plus 18M at very low prices, plus 1.2M at $1 (lol?), plus 119M shares under another plan, plus 355M under the 2017 equity plan (which they presumably created just before the IPO), plus 16M under employee purchase plan, plus 2.5M, plus 13M…

… do you see the problem here?

200M shares were sold at IPO, plus a possible 30M. But hundreds and hundreds of millions of shares are about to flood the market. So even if Snapchat was  a resounding success, which it won’t be, any profit you could make will be eaten alive by the free/cheap shares above.

And let’s not even talk about the three classes of stocks, A, B and C. Because as a shareholder, you do not get to vote on the company’s future: the founders decide everything. They fuck up = you can’t do anything. See:BBD.A and BBD.B for more information on what usually happens to those garbage companies.

But OK, votes don’t matter much anyway: let’s go into revenues.

Do I even need to keep going here? Do I?

Guys: this company had $400M in revenues in 2016. That was after monetizing their platform and “150 million users” fully. This number can perhaps continue to grow, but nowhere near as fast as anyone can expect. They’ll be lucky to ever break the $1B mark.

On that $400M figure, they lost $500M. And looking at where the money go, you see that their cost of revenue is higher than their entire revenue. That’s right: to receive a dollar, they have to pay a dollar and ten cents! Let’s not even mention the $180M they invested in research and development… To do what exactly? It’s a camera app? What the hell are they trying to develop?

I mean, I won’t even go further. This company is a complete nightmare. Just look at this:

This is the kind of stuff that’s entertaining or, rather, slightly amusing, for perhaps one tenth of a second, one time. Then you realize it’s really stupid and completely worthless. “Sponspored lens” my ass.

So anyway, I’m going to stop here with one key word that sums it all up


Snapchat is at best a fading fad. I doubt it will still be around ten years for now (being generous here) and if it is, it still won’t be profitable anyway, so why bother? These guys are going against Facebook, Google, Twitter and a bunch of major players. They are at best a niche app and to claim it should be valued at $30B is completely silly. At best, Snapchat is worth a billion and I am being very, very generous here. Eventually, people will move on and it will be “Candy Crushed” if you see what I mean.

So who is stupid enough to invest into it? People hoping it goes even higher so they can resell, I guess. It might take some time until it comes back to Earth. In fact, I think it continues to move up for a while as banks and big players prop it up so they can unload, but make no mistake: they are going to crash.

I wish shares were available to short because really, I can’t wait to short it. There is no way Snapchat will suceed, period. Not at a $30B valuation.

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