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Snap falls to IPO price

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Re: Snap falls to IPO price

#211

Post by daveFNbuck »

gdilla wrote: post #207
daveFNbuck wrote: post #180

Earlier quoted context omitted.

Everything you said other than ephemerality applies to every other messaging platform, including Facebook Messenger. How does ephemerality help you shoot the shit better than a text message?

Ya, you're not getting it. First, a transcript of your communication is not desirable to many (if you find this puzzling, it's because you're old :P). Second, FB Messenger or any chat client you have to manage the groups (forget it).

How are Snapchat's group messages different? I thought it only did one-on-one.

Re: Snap falls to IPO price

#212

Post by dx034 »

prklmn wrote: post #18
acchow wrote: post #16

Earlier quoted context omitted.

So this isn't true. Any average Joe could open a standard trading account and subscribe to the IPO.

The access to shares still isn't even comparable

It is. The quota you'll get is the same. Just that large companies have more time to analyse and talk to others and can better estimate how much potential the stock has.

Re: Snap falls to IPO price

#213

Post by snapgod »

datamingle wrote: post #165
beager wrote: post #8

What does $SNAP need to do to deliver on the hype? Is there anything that can make $SNAP a good investment for anyone other than the parties involved in trading the IPO? I tend to be bearish on $SNAP in general, but I'm interested in the discussion. How do they right the ship and boost back up to that $25-30 range? What's their play?

They do AR & Marketing amazingly and hardware quite well. I am not sure a social network is their best business model though. Hopefully they can pivot to something else using what they are great at.

Does "doing AR amazingly" go beyond overlaying bunny ears and whiskers on a person's face? I'm not sure how much longer they can ride that out, and besides, Instagram showed they can do that well too. Actually, anybody who can follow a basic OpenCV tutorial can do it.

Another story on HN shows what developers are doing with Apple's ARkit, and it's more impressive than anything I've seen from Snapchat.

Re: Snap falls to IPO price

#214

Post by puranjay »

likpok wrote: post #30
skywhopper wrote: post #7

As skeptical as I am that Snap will ever be a moneymaker, this data point is not meaningful in any way. Facebook traded below (often _well_ below) its IPO price for the first 15 months on the market.

Facebook was profitable before it went public, and faced serious strategic challenges immediately post IPO (specifically, mobile was exploding and Facebook's mobile story was not good -- it didn't even have advertising). I guess the meaningfulness of this data point is that people are dubious that SNAP will succeed long term. But that's somewhat tautological: if people thought SNAP would succeed, they'd buy it.

I've seen a big shift among my friends (all below 30) social media usage in the last six months.

Used to see a random one-off Whatsapp story. Now I see 2-3 stories every day.

Instagram stories are much more popular. See anywhere from 5-20 stories from friends as well as brands.

Point is, people who use these stories will never shift to Snapchat now. Even if it doesn't grow Facebook's audience, these features will plug the leaks

Re: Snap falls to IPO price

#215

Post by fergie »

__jal wrote: post #22
acchow wrote: post #17

Earlier quoted context omitted.

Facebook is >$200 per user.

Facebook is a panopticon with a massive dataset on each user, and has a pretty substantial moat by way of users 'punishing' each other for leaving, among other competitive advantages. Snapchat is a trendy app that could easily become uncool, and when it does, I don't see how users feel much of a penalty for leaving in the same way FB users do.

> Facebook ... has a pretty substantial moat by way of users 'punishing' each other for leaving

What do you mean by this?

Re: Snap falls to IPO price

#216

Post by prostoalex »

sytelus wrote: post #187
chimeracoder wrote: post #121

Earlier quoted context omitted.

> This seems like a pretty good reason to auction the shares in order to maximize the amount of money the company takes in. That they very rarely do has always seemed kind of dirty to me. There's nothing dirty about it. Public investors prefer to have a single price, because that's, well, how public markets generally operate after an IPO. They don't want to have to participate in an auction. The purpose of underwriti…

Why one need underwriter at all? Why certain investors are offered lower unfair price?

Because an IPO typically involves floating a largish number of shares at once, so you need a guaranteed, money-in-the-bank, commitment to the tune of tens of millions of dollars, potentially more.

Underwriters have access to a bunch of people who marked themselves as aggressive investors (SEC rule to avoid snake oil companies pitching their imminent incredible IPO to a random grandma), who can then commit to smaller chunks.

If you build a platform that is capable of raising eight-digit amounts, you can advertise yourself to pre-IPO companies as a possible underwriter.

A few questions to consider.

1) How are you going to acquire those investors? Underwriters typically enjoy a large wealth management group that can provide them with a list of eligible investors.

2) How will you handle the financial transactions themselves? Underwriters typically enjoy having a banking license or two, which allows them to hold customer funds, as well as brokerage license or two, which allows them to act as a custodian for those shares once they're bought.

3) How will you, the middleman platform, get paid?

Re: Snap falls to IPO price

#217

Post by prostoalex »

chimeracoder wrote: post #76
skywhopper wrote: post #65

Earlier quoted context omitted.

The facts that they are the primary beneficaries of underpriced IPOs (ie, the biggest reward for the smallest risk) and that they are the all-powerful gatekeepers of the process and that most of these IPOs shoot up in price on day one (meaning that their customers are leaving huge amounts of money on the table) is a pretty good indication. If you don't count fully aligned incentives as evidence, it's at least very cl…

> The facts that they are the primary beneficaries of underpriced IPOs (ie, the biggest reward for the smallest risk) and that they are the all-powerful gatekeepers of the process and that most of these IPOs shoot up in price on day one (meaning that their customers are leaving huge amounts of money on the table) is a pretty good indication On the other hand, the entity that they are taking money from is literally th…

> when the price shoots up, it's called leaving money on the table, because it's money that the company isn't raising in their IPO, and is instead going to the banks

While true, the company can manage that risk by limiting the amount of shares to float, and then allocate more shares for sale in a secondary offering (Tesla just did one in 2016).

The game theory kicks in, though - when the float is too small, who's going to be the first sucker to bite on the buyers' side, knowing that a massive amount of shares is prepared for a secondary float shortly afterwards? I sure as heck wouldn't touch it, why not have someone else do price discovery.

Re: Snap falls to IPO price

#218

Post by prostoalex »

jacquesm wrote: post #32
davidw wrote: post #28

Earlier quoted context omitted.

> It was oversubscribed tho, so I got half the quantity I wanted and sold shortly after opening. This seems like a pretty good reason to auction the shares in order to maximize the amount of money the company takes in. That they very rarely do has always seemed kind of dirty to me.

That would stop the issuers from making a bundle on just about every IPO and we can't have that now, can we?

A company has a set IPO date and has filed documents with SEC on the number of shares they intend to float. The company thus has an urgency to sell 100% of that block of shares the day prior to the IPO or risk headlines of IPO being pulled due to the "lack of interest".

Investor doesn't quite have the same urgency. Sure, they could buy the stock the day prior to the IPO, but they could also get it the day of IPO, or the next day, or the next week, or a year after. That's the beauty of the public markets - there's always more shares as long as one is willing to put up cash.

Now, how will the company compensate the investor for the urgency?

Re: Snap falls to IPO price

#219

Post by NDT »

csomar wrote: post #79
habosa wrote: post #10

$17.00 was the IPO price but only for investors with access. Your average investor with an eTrade account saw a price of $24.00+ when the market opened that morning, and it hit almost $27.00 that day. So those folks have seen a 30%+ drop since IPO. Given that Snap paid out billions in IPO bonuses to executives and other employees, it's turned out to be a pretty big wealth transfer from retail investors to Snap employ…

They sold at 17$ (ipo prices) not higher. So right now, both sides are equal.

Not really. Retail investors have netted $-7 while "insiders" netted $0. This is of course assuming that they've held on to this day.

Re: Snap falls to IPO price

#220

Post by bguillet »

acchow wrote: post #14
habosa wrote: post #10

$17.00 was the IPO price but only for investors with access. Your average investor with an eTrade account saw a price of $24.00+ when the market opened that morning, and it hit almost $27.00 that day. So those folks have seen a 30%+ drop since IPO. Given that Snap paid out billions in IPO bonuses to executives and other employees, it's turned out to be a pretty big wealth transfer from retail investors to Snap employ…

Did you try to subscribe to the IPO? It was not hard at all. I'm an "average" investory with a standard Charles Schwab trading account and subscribed to it with a few clicks of my mouse. I imagine anyone else could with their brokerage. It was oversubscribed tho, so I got half the quantity I wanted and sold shortly after opening.

Do you need to be an accredited investor to subscribe to an IPO?
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