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Investors think Snapchat is worth $4 billion. That’s insane.

washingtonpost.com

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Re: Investors think Snapchat is worth $4 billion. That’s insane.

#31

Post by junto »

Part of the argument here for the valuation is that teens are leaving Facebook and moving over to services like SnapChat and Instagram.

Maybe I'm missing something, but do teens really have that much disposable income? Do they click on / respond to online ads?

Surely older people are a much more valuable target market? When I look at my parents, they are much more likely to be duped into buying something through clicking on ads. Most of the time my parents don't even realise they are clicking on an ad.

Sometimes I think this tech market is aiming as the wrong segments.

Re: Investors think Snapchat is worth $4 billion. That’s insane.

#32

Post by Rimpinths »

iamshs wrote: post #4

On one hand I think this is disproportionate amount of value, but on other I think investors with lot of money are not really that stupid and see some sort of value in this.

Economist Joseph Lawrence of Princeton University in 1929: “The consensus judgment of the millions whose valuations function on that admirable market, the Stock Exchange, is that stocks are not at present over-valued. Where is that group of men with the all-embracing wisdom which will entitle them to veto the judgment of this intelligent multitude?”

Alan Greenspan in 1999: "To anticipate a bubble about to burst requires the forecast of a plunge in the prices of assets previously set by the judgments of millions of investors, many of whom are highly knowledgeable about the prospects for the specific investments that make up our broad price indices of stocks and other assets."

Re: Investors think Snapchat is worth $4 billion. That’s insane.

#33

Post by tokenizer »

octotoad wrote: post #30

Here's how I like to view these 'valuations': I am certainly a 'nerd', 'geek', 'tech-head'; whatever sort of label you want to throw at me. I am also the furthest you could get from somebody who has half a clue about stocks, mergers, IPOs etc. Forget about the hype, the amount of users, the "mindshare", the paradigm-shifting omg-teh-adsense-ponies. To a 'regular joe' like myself, all I think when I hear anything abou…

The problem is that your real worth, and your potential worth are two different things. Facebook/Tencent finds their users and especially their youth valuable. Factoring that into their value, they think they're worth 4 billion.

That said, that's far too high of a real worth for this company, illustrating how a prospective buyer can really drive up your companies pricetag. It may factor in real revenues and growth potential, but this price is largely market speculation. Very risky, but apparently worth it for some big players. My advice to the little guy is to stay out of it cause if one thing goes wrong the whole price could come tumbling down.

Re: Investors think Snapchat is worth $4 billion. That’s insane.

#34

Post by vdaniuk »

epa wrote: post #8

These start ups get massive investment, IPO for retarded valuations, and all the venture firms/owners cash out leaving the market and institutional investors holding the rest. Slowly these companies die.. but the original people have already made their money and are on to something else. Classic. For instance, is there any sane reason why a website like rapgenius.com needs to IPO to raise public funds? The answer is…

Do you really want to know why rapgenius needs IPO money or are you just using it as a rhetorical vessel to justify use of such inflamatory lexis as "retarded" and "classic"?

I have no hopes on influencing your opinion but want to provide my version of the explanation. Surely it is only an opinion, I have no authority on the subject.

Rapgenius needs to IPO to massively scale in text annotation business providing context and meaning to texts that are far away from rap. Immense value can be gained if RapGenius or NewsGenius will provide a platform to annonate, verify and explain complicated news articles, scientific studies, techical documentation, anything that requires metadata for better understanding. This feat was tried by many and all of them failed, including Google, remember Sidewiki?

Rapgenius has a leg to stand on -- working annotation platform. If they are able to branch into other areas that are more appealing to mass market, the possibilities of growth are immense.

Re: Investors think Snapchat is worth $4 billion. That’s insane.

#35

Post by fennecfoxen »

dotcoma wrote: post #2

Insane, tilting on the criminal side.

Rich people throwing their money away on hare-brained schemes to make more money by paying software engineers - insane, maybe, but this is borderline criminal now? What are we, the Bolsheviks? :P

Re: Investors think Snapchat is worth $4 billion. That’s insane.

#36

Post by vdaniuk »

michaelochurch wrote: post #11
epa wrote: post #8

These start ups get massive investment, IPO for retarded valuations, and all the venture firms/owners cash out leaving the market and institutional investors holding the rest. Slowly these companies die.. but the original people have already made their money and are on to something else. Classic. For instance, is there any sane reason why a website like rapgenius.com needs to IPO to raise public funds? The answer is…

Nailed it.

If by "nailed" you mean "reduced a probability of rational discourse by trolling" then sure, he nailed it.

Re: Investors think Snapchat is worth $4 billion. That’s insane.

#37

Post by tixocloud »

octotoad wrote: post #30

Here's how I like to view these 'valuations': I am certainly a 'nerd', 'geek', 'tech-head'; whatever sort of label you want to throw at me. I am also the furthest you could get from somebody who has half a clue about stocks, mergers, IPOs etc. Forget about the hype, the amount of users, the "mindshare", the paradigm-shifting omg-teh-adsense-ponies. To a 'regular joe' like myself, all I think when I hear anything abou…

This definitely feels like the 21st century gold rush where everyone's just rushing in before it's too late just in case that hot tech startup becomes the next Google. I don't know if wisdom can overpower the greed that people have.

Re: Investors think Snapchat is worth $4 billion. That’s insane.

#38

Post by DenisM »

junto wrote: post #31

Part of the argument here for the valuation is that teens are leaving Facebook and moving over to services like SnapChat and Instagram. Maybe I'm missing something, but do teens really have that much disposable income? Do they click on / respond to online ads? Surely older people are a much more valuable target market? When I look at my parents, they are much more likely to be duped into buying something through clic…

Teenagers are prime audience for brand advertising. Fashion, makeup, clothing, drinks - brands want to get them young while they are still impressionable.

Re: Investors think Snapchat is worth $4 billion. That’s insane.

#39

Post by jroseattle »

junto wrote: post #31

Part of the argument here for the valuation is that teens are leaving Facebook and moving over to services like SnapChat and Instagram. Maybe I'm missing something, but do teens really have that much disposable income? Do they click on / respond to online ads? Surely older people are a much more valuable target market? When I look at my parents, they are much more likely to be duped into buying something through clic…

No, but those teens are going to transition into adults, with (hopefully) some disposable income at that time. Don't know if it justifies the valuation, but certainly being a default in a large market is worth something to somebody.
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