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Snap Jumps in Debut After App Maker Raises $3.4B in IPO

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Re: Snap Jumps in Debut After App Maker Raises $3.4B in IPO

#201

Post by abhi3 »

unholiness wrote: post #189

Economics novice here. How did we get such a huge difference (40%!) between the IPO price and the current price, when both sides had $3.4 billion at stake on getting that price "right"? Is there some huge information disparity here? Moreover, if investors feel that $24 a share is a fair price, why weren't they swooping in before the IPO and, say, offering $20 a share for the whole chunk? Sorry if this seems like a ri…

Why would investors pull out $3.4 billion of capital from other assets to invest in Snap if the issue was accurately priced?

As an investor I wouldn't pay 100 to buy something worth ...100. Price it below its fair value and we might talk.

When trying to mobilize capital on this scale and at this risk level (no revenue, stalled growth), the required undervaluation is significant.

Re: Snap Jumps in Debut After App Maker Raises $3.4B in IPO

#202

Post by technofiend »

ska wrote: post #196
hugs wrote: post #173

Earlier quoted context omitted.

Yup, solid advice re: waiting. Generally, I've heard it as "don't do anything drastic with the money for a year". That gives enough time to let the emotions cool down.

It's not even just the emotions. The money isn't real until it settles.

And you owe taxes on it, regardless. I heard some sob stories from the brokers at Charles Schwab after Enron went under - energy traders who had borrowed heavily (on margin) against positions that were now worthless. Oy.

Re: Snap Jumps in Debut After App Maker Raises $3.4B in IPO

#203

Post by unholiness »

chimeracoder wrote: post #199
unholiness wrote: post #189

Economics novice here. How did we get such a huge difference (40%!) between the IPO price and the current price, when both sides had $3.4 billion at stake on getting that price "right"? Is there some huge information disparity here? Moreover, if investors feel that $24 a share is a fair price, why weren't they swooping in before the IPO and, say, offering $20 a share for the whole chunk? Sorry if this seems like a ri…

> Moreover, if investors feel that $24 a share is a fair price, why weren't they swooping in before the IPO and, say, offering $20 a share for the whole chunk? Well, they were. When a company IPOs, it doesn't sell its stock directly on the market - it sells it to intermediary bankers, who buy it at a price that they think will lock in profit for them when they sell it at the opening bell. (In addition, the early purc…

Hmm. To me that just shifts the questions to the bankers.

If people (who don't know anything the bankers don't know) value the stock at $24, shouldn't there also be competing bankers willing to offer $20 a share for the whole lot, igniting a bidding war that converges roughly near the real price?

Obviously bankers need to make some money. But I don't see how this kind of deal has anywhere near a $1.4 billion dollar overhead, and I'm just boggled by the scale of the disparity.

Re: Snap Jumps in Debut After App Maker Raises $3.4B in IPO

#204

Post by lozaning »

giarc wrote: post #161
InternetUser wrote: post #27

Earlier quoted context omitted.

And that's not their only product: Bitmoji has been the #1 iPhone app overall since January 11, and it was already the #1 iPhone Utility app since July 22, 2016 (Log in to see) - https://www.appannie.com/apps/ios/app/bitmoji-keyboard-your-... https://www.appannie.com/apps/ios/top/united-states/overall/... And yesterday on eBay, 22 pairs of Spectacles were sold, with one pair went for $229 and 2 others went for $200 e…

Regarding the Spectacles. They only fetch those prices due to scarcity. If Snap made them available to a more wider audience, people wouldn't be buying them on eBay.

They're now available for any member of the general public to go buy, no invite or celebrity status required.

Re: Snap Jumps in Debut After App Maker Raises $3.4B in IPO

#205

Post by idiot_stick »

michaelbuckbee wrote: post #197
idiot_stick wrote: post #54

Earlier quoted context omitted.

> How do you value that? It's a pair of glasses that stream video from a camera. I'm not saying it's not cool, but what is so crazy about it that it's hard to value? > What's that worth? If you're buying IPO shares and can't answer that question yourself, you're probably doing something wrong.

To me, it's a thought experiment about where SnapChat will be a few years in the future. Consider that they are pretty indisputably the leaders in terms of shipping real, actual working AR on mobile -> https://youtu.be/Pc2aJxnmzh0 So "how do you value" the number one AR company on the planet having shipped their first hardware device that: - Has sidestepped all the "glasshole" baggage of Google Glass - Genuinely nice…

>So "how do you value"...

The same way you value anything. AR might be "new", but "new" things aren't new; they come out all the time, forever.

>It's hard to look at an early click-wheel, monochrome screen iPod and see a mobile phone ecosystem worth trillions of dollars

Which is why it would be incredibly naive to, in any way, predict Snapchat to have that sort of success, because it is so incredibly rare. It's like playing the lottery: yes there's a winner, but the odds of any individual company becoming "best ever" are incredibly slim. I have the same sentiment toward TSLA. I invest accordingly.

I think we are saying the same thing, I just lean cynical.

Re: Snap Jumps in Debut After App Maker Raises $3.4B in IPO

#206

Post by chimeracoder »

unholiness wrote: post #203
chimeracoder wrote: post #199

Earlier quoted context omitted.

> Moreover, if investors feel that $24 a share is a fair price, why weren't they swooping in before the IPO and, say, offering $20 a share for the whole chunk? Well, they were. When a company IPOs, it doesn't sell its stock directly on the market - it sells it to intermediary bankers, who buy it at a price that they think will lock in profit for them when they sell it at the opening bell. (In addition, the early purc…

Hmm. To me that just shifts the questions to the bankers. If people (who don't know anything the bankers don't know) value the stock at $24, shouldn't there also be competing bankers willing to offer $20 a share for the whole lot, igniting a bidding war that converges roughly near the real price? Obviously bankers need to make some money. But I don't see how this kind of deal has anywhere near a $1.4 billion dollar o…

> If people (who don't know anything the bankers don't know) value the stock at $24, shouldn't there also be competing bankers willing to offer $20 a share for the whole lot, igniting a bidding war that converges roughly near the real price?

Yes, though with a discount factor applied due to the risk involved. And particularly for a high-profile IPO like $SNAP, and one in which a lot of the sellers on Day 1 will be casual retail investors placing market orders[0], it's hard to gauge exactly how much hype there will be.

[0] ie, as opposed to limit orders

Re: Snap Jumps in Debut After App Maker Raises $3.4B in IPO

#208

Post by atomical »

mi100hael wrote: post #158
Domenic_S wrote: post #120

Earlier quoted context omitted.

Posting on HN (or reddit, or...) will never die, because you get to correct people who are wrong on the internet. Snap not so much...

I don't think that's quite right. Snapchat does have a chat feature which allows you to essentially send feedback on peoples snaps/stories, so you could absolutely tell people they're wrong for making some statement.

I think it was a joke.

Re: Snap Jumps in Debut After App Maker Raises $3.4B in IPO

#209

Post by bhalperin »

unholiness wrote: post #189

Economics novice here. How did we get such a huge difference (40%!) between the IPO price and the current price, when both sides had $3.4 billion at stake on getting that price "right"? Is there some huge information disparity here? Moreover, if investors feel that $24 a share is a fair price, why weren't they swooping in before the IPO and, say, offering $20 a share for the whole chunk? Sorry if this seems like a ri…

Matt Levine explains this well https://www.bloomberg.com/view/articles/2016-11-25/appeals-c...
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