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Snap Inc. S-1

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Re: Snap Inc. S-1

#21

Post by nlittlepoole »

leothekim wrote: post #18
stuckagain wrote: post #8

"We have committed to spend $2 billion with Google Cloud over the next five years and have built our software and computer systems to use computing, storage capabilities, bandwidth, and other services provided by Google, some of which do not have an alternative in the market." There's some numbers for you that Google wouldn't have provided (as far as I have seen).

Is it not possible to build your own "alternative in the market" for $2 billion?

There is also the opportunity cost of investing in hardware

Re: Snap Inc. S-1

#23

Post by urs2102 »

> We have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability.

Also having only 158 million daily active users up from 150 million in June is definitely interesting and a lot smaller growth jump than I had expected.

Revenue up from $58MM in 2015 to $405MM despite a loss of $515MM last year. Wishing them best of luck, but I wonder how much their competition is hurting their growth (Instagram stories for example)?

Also: > We are not aware of any other company that has completed an initial public offering of non-voting stock on a U.S. stock exchange. We therefore cannot predict the impact our capital structure and the concentrated control by our founders may have on our stock price or our business.

Hmmm... will be interesting...

Re: Snap Inc. S-1

#24

Post by stuckagain »

richardwhiuk wrote: post #12
stuckagain wrote: post #8

"We have committed to spend $2 billion with Google Cloud over the next five years and have built our software and computer systems to use computing, storage capabilities, bandwidth, and other services provided by Google, some of which do not have an alternative in the market." There's some numbers for you that Google wouldn't have provided (as far as I have seen).

I find the "do not have an alternative in the market" comment interesting - is there really anything which AWS does not have the GCE does?

Snap runs on Google App Engine, not on GCE (or perhaps they use both).

Re: Snap Inc. S-1

#25

Post by synaesthesisx »

Is anyone else seeing these numbers? How are they pushing for such a high valuation with those kind of losses?

I suspect that Snap is merely capitalizing on traditional advertising metrics (engagement, CTR) which don't translate over on their app, and the advertisers just haven't caught on yet. People play with filters because they're funny/amusing, but those impressions don't convert into purchases in the same way other types of ads would.

Earlier last year Snapchat temporarily featured X-Men filters exclusively ahead of the movie release - I interacted with those for the novelty (and mainly because they disabled all the other filters so there were no other options) but I did not see the movie.

Again, I'm not sure if they follow something similar to a CPC model or what, but I bet it's expensive. If the advertisers decide it's ineffective their newfound revenue growth certainly won't be sustainable.

Re: Snap Inc. S-1

#26

Post by abalone »

d4l3k wrote: post #5

> Although other U.S.-based companies have publicly traded classes of non-voting stock, to our knowledge, no other company has completed an initial public offering of non-voting stock on a U.S. stock exchange. We cannot predict whether this structure and the concentrated control it affords Mr. Spiegel and Mr. Murphy will result in a lower trading price or greater fluctuations in the trading price of our Class A commo…

How does this differ from what Facebook and Google did? Did they offer stock that technically had voting power but in practice was massively outweighed by the founders' voting power? Whereas Snapchat is dispensing with such technicalities and just outright stating the founders control it?

Re: Snap Inc. S-1

#27

Post by brandon272 »

chinathrow wrote: post #14
stuckagain wrote: post #8

"We have committed to spend $2 billion with Google Cloud over the next five years and have built our software and computer systems to use computing, storage capabilities, bandwidth, and other services provided by Google, some of which do not have an alternative in the market." There's some numbers for you that Google wouldn't have provided (as far as I have seen).

Wow, single cloud lock-in filed with the SEC. Isn't 400m/y a bit steep for storage and compute power?

$400 million annually represents a monthly cost per user of $0.21 at 158 million daily active users. Which seems high at scale when looking at storage + bandwidth alone, I would think, but I'm also not a big Snapchat user so I'm not sure what is going on in terms of long term storage of video on an account level.

Re: Snap Inc. S-1

#28

Post by trendia »

vineetch wrote: post #19

They spent $890,339 on security for Evan Spiegel in 2016? Why does he need that much security? Who is trying to hurt him?

According to Wikipedia, he has $2b in wealth [0]. I have no idea whether $900,000 / year is high or low for someone of that net worth.

[0] https://en.wikipedia.org/wiki/Evan_Spiegel#Personal_life

Re: Snap Inc. S-1

#30

Post by hrrsn »

brandon272 wrote: post #27
chinathrow wrote: post #14

Earlier quoted context omitted.

Wow, single cloud lock-in filed with the SEC. Isn't 400m/y a bit steep for storage and compute power?

$400 million annually represents a monthly cost per user of $0.21 at 158 million daily active users. Which seems high at scale when looking at storage + bandwidth alone, I would think, but I'm also not a big Snapchat user so I'm not sure what is going on in terms of long term storage of video on an account level.

I would think their bandwidth costs are astronomical. Since 19/3/16 Snapchat has used 14.8GB of mobile data on my iPhone alone - not including WiFi.
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