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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

#211

Post by brentm »

pm90 wrote: post #85
chollida1 wrote: post #13

I'm happy for the NYSE that this went well. SNAP has done some pretty large volume so far with no problems. Interestingly enough, well atleast to someone who cares about the cash equity markets, the NYSE actually did a test run last week to try and simulate the chaos that occurs during any hot IPO. So now we know that there is atleast some appetite for shares with no controlling interest and no indication of paying o…

> So now we know that there is atleast some appetite for shares with no controlling interest and no indication of paying out a dividend any time soon. A current market cap of 30 Billion is a pretty darn big accomplishment! This is really disturbing. I don't know if its an indicator of too much money in the market, or just the fact that the market itself has expanded so much. Why would investors be OK with losing powe…

> Why would investors be OK with losing power?

Everything is ok while everything is ok.

If the company was to run into trouble these restrictions would probably be another reason (in addition to the performance) for large investors to avoid the company. Long term it remains to be seen if this will matter or not but my guess is that as long as it is sailing high many won't care.

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

#212

Post by rokhayakebe »

linuxkerneldev wrote: post #34

This $27.8 billion dollar valuation tells me that somewhere along the line, my job and lifestyle have caused me to detach from a significant chunk of society. I've never used Snap or their platform. I don't even really know what the benefit of their service. I am curious if I'm in the minority or if there's lots of developers like me who aren't able to comprehend these valuations.

Valuation are not very meaningful pre-IPO I suppose because there are a lot of downside. So you can invest $1M at a $1B valuation, sell the company for $30M and still come out with $XX millions.

I guess the same is not true for the average person who buys into a public company. Because if you buy at $1 and tomorrow it is worth $.32c I do not see how you will not loose money.

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

#215

Post by soundwave106 »

capkutay wrote: post #53
zach417 wrote: post #38

I don't understand how the existence of Snap adds over $30B of utility to the economy.

> I don't understand how the existence of [any company ever] adds over [their current valuation] of utility to the economy; furthermore, if [company] fell of the face of the earth, everyone would just switch to [their competitor], and life would resume ut fit. Peter Thiel's quote should be updated: We wanted flying cars, instead we got 1̶4̶0̶ ̶c̶h̶a̶r̶a̶c̶t̶e̶r̶s [trivialization of product's value]. These comments su…

Personally, I wouldn't put too much "trust" in the market cap number. A lot of times at this stage, the investing is rather speculative. We will find out what the market really thinks in a few months.

I imagine people are probably buying the stock in the hopes that this is the next Facebook (which is now roughly 4x the initial day end trade price). There's also, however, the possibility that this might be the next Groupon IPO equivalent (initial market cap at the close: 16.5 billion; current market cap: 2.34 billion, about 20% of the initial opening day price). We'll see.

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

#216

Post by sjg007 »

cookiecaper wrote: post #118
linuxkerneldev wrote: post #34

This $27.8 billion dollar valuation tells me that somewhere along the line, my job and lifestyle have caused me to detach from a significant chunk of society. I've never used Snap or their platform. I don't even really know what the benefit of their service. I am curious if I'm in the minority or if there's lots of developers like me who aren't able to comprehend these valuations.

I started using Snapchat after they added their dynamic filters. My kids, aged 2-7, think it's hilarious to have their faces warped or overlaid with funny images. My wife and I mostly take videos of them giggling while their face has puppy ears and then send it to each other and/or their grandparents.

Good feature for Facebook to adopt in their app. Even though you can save the photo and upload it.

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

#217

Post by xutopia »

linuxkerneldev wrote: post #34

This $27.8 billion dollar valuation tells me that somewhere along the line, my job and lifestyle have caused me to detach from a significant chunk of society. I've never used Snap or their platform. I don't even really know what the benefit of their service. I am curious if I'm in the minority or if there's lots of developers like me who aren't able to comprehend these valuations.

That valuation is predicated on the assumption that the younger generation that uses the service will continue to use it in their 30s.

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

#218

Post by graeham »

jmharvey wrote: post #134
pm90 wrote: post #85

Earlier quoted context omitted.

> So now we know that there is atleast some appetite for shares with no controlling interest and no indication of paying out a dividend any time soon. A current market cap of 30 Billion is a pretty darn big accomplishment! This is really disturbing. I don't know if its an indicator of too much money in the market, or just the fact that the market itself has expanded so much. Why would investors be OK with losing powe…

It could be an indicator that a lot of people invest without regard for foundational questions like "does this valuation make sense" or "does my ownership interest grant me any control of the company?" And I'll be the first to raise my hand on that front. On the face of it, I'm not really interested in owning a stock like this. But I've stopped picking stocks entirely, now I just invest in the stock market through in…

I think the incentives of different investor types should be considered.

If you're a speculative investor and plan to own for If you're a long term investor, say >2 years, non-voting shares means the company doesn't have to burn itself for quarterly or annual results.

Activist investors won't like it (but there's not really that many of them).

Will probably work well as long as things are going well for the company. If things go badly, management will need to be very self-aware or the recourse will be a large discount to the share price.

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

#220

Post by edblarney »

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…

1) They try to be a shade conservative when pricing for IPO because the stock going down on day 1 is a very bad.

2) The underwriters are invented to keep it low because they basically keep the upside - i.e. they buy from Snap at the low price and will sell the next day on the pop.

3) It's volatile because there's little basis for the valuation - they're making almost no money and have a massive, massive valuation = it's hard to establish what they are worth = more variation.

4) Retail investor hype. Every dentist, doctor and retired guy wants a piece to feel like they are 'getting part of the IPO' and there's irrational exuberance which pushes the prices around.

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