back to article 2016: Snapchat loses $515m... 2017: Snapchat rips veil off $3bn IPO

Millennial vanity magnifier Snap Inc, the post-profit maker of Snapchat, hopes to raise $3bn in an initial public offering. The builder of sometimes cute and occasionally terrifying photo filters says in a filing to the SEC that it will debut on the stock market later this year, specifically the New York Stock Exchange using …

  1. Sampler

    Fund managers

    Please god none of my pension fund managers invest in this crap!

    1. Tom 7

      Re: Fund managers

      Don't worry - their charges will make any share fluctuations irrelevant.

  2. Mark 85

    So can anyone tell me...

    How a company that's never made a profit, operated at a loss, deals in digital user photos on someone else's cloud is valued at $25B???? What the hell are the analysts smoking?

    1. This post has been deleted by its author

    2. Pascal Monett Silver badge

      Not only that

      What money it makes is based on advertisement, it already doesn't make enough and specifically plans to not make enough in the future.

      A company that "may eventually break into the black" is not a company I'm interested in, and I can't see how anyone who wants to make money will be.

      A $3 billion IPO ? We'll see how that crashes and burns (unless, of course, the Internet proves once again how stupid the collective can get).

    3. Anonymous Coward
      Anonymous Coward

      Re: So can anyone tell me...

      Don't you know that everything that has "chat" in its name is very valuable today? People chat, thereby it must be a good business! Even if they rely on a single simple product easy to clone...

      Hey, look, they can even date models and actresses, thus they must be very smart!

      But this is probably the real reason of the IPO - models and actresses are very expensive...

    4. Anonymous Coward
      Anonymous Coward

      Re: So can anyone tell me...What the hell are the analysts smoking?

      Why were tulips suddenly so valuable in the Tulip bubble? The whole idea of a bubble is that it is based on things which have no intrinsic value and so cannot be valued, and which people have to buy into for fear of missing out. Housing markets can be grossly inflated but at the bottom there is land and houses. But social media companies are ideal because there is nothing to compare them to but other social media companies. You don't need them at all. If they disappear tomorrow there's email.

      Shares in Snapchat are going to be bubble tokens, bought and sold while people ignore the disconnection from reality. Perhaps the company will suddenly become hugely profitable and the buyers will cash in. The chance may be only one in a million but - you're gambling with other people's money, anonymously in a fund - are you prepared to risk missing out on the Next Big Thing?

    5. Version 1.0 Silver badge
      Meh

      Re: So can anyone tell me...

      "What the hell are the analysts smoking?"

      They are smoking on-line advertising, it's way more addictive than tobacco.

      I'm continually baffled by the amount of money that corporations will throw at internet advertising when most of the end-users will do anything to avoid looking at it. I'm convinced that the click-through rate is largely driven by fat fingers and mistakes that users immediately back away from - it's all smoke and cracked mirrors. Facebook regularly admits to miscalculating their user viewing figures and they are probably the most open and honest company in the business.

  3. Captain DaFt

    Geez already!

    I'm really tired of this trend of running a cash blackhole web venture and trying to achieve profitability by spamming your users/customers/clients with advertisements, data hoovering and malware.

    The Internet was supposed to be better than this.

  4. Kevin McMurtrie Silver badge

    Beautification filters for the IPO

    Losing $514.6 million on $404.5 million profit means they're spending an incredible $919.1 million per year. Making investors happy and covering expenditures would require revenues of at least $1.5 BILLION a year plus growth. That kind of money exists but competitors will pop up everywhere to take a cut. The next startup will figure out how to offer competing products at $100 million per year.

    1. Prst. V.Jeltz Silver badge

      Re: Beautification filters for the IPO

      " The next startup will figure out how to offer competing products at $100 million per year."

      I really cant figure out how they would spend that much! isnt it just a little app that sends a photo from A to B? (b being a lot of people i guess)

      Also how can they claim a a profit and a loss at the same time?

      and how can a compant planning to never stop making a loss still exist? and why is that a double model?

      ..and do i care?

      1. lglethal Silver badge
        WTF?

        Re: Beautification filters for the IPO

        Just to help you out there - they never claimed a Profit, they claimed increased Revenue (i.e. increased sales), but somehow they still managed to waste an additional $500 Million on top of what they got through Revenue. Amazing...

        I do not understand how a company like Snapchat can spend near enough to a Billion a year. The App is already written. The costs of Network Transfers of the data are carried by the user. Ok they Need Server space, but thats $400 Million a year (according to the article). Where the hell does the other $600 Million go? After all, there's only so much you can spend on coke and hookers in a year!

        1. Andrew Moore

          Re: Beautification filters for the IPO

          "I do not understand how a company like Snapchat can spend near enough to a Billion a year"

          My guess is: Sky high salaries and bonuses for the boys at the top.

          1. Anonymous Coward
            Anonymous Coward

            Re: Beautification filters for the IPO

            Don't forget the coke and hookers...

        2. midcapwarrior

          Re: Beautification filters for the IPO

          Well it helps when you have to 150 million+ to one of the "founders" including 100 million in 2016.

          http://www.msn.com/en-us/money/companies/snapchat-paid-its-third-cofounder-dollar158-million-in-cash-to-disappear/ar-AAmzasP?li=BBmkt5R&ocid=spartanntp

    2. Arctic fox

      @Kevin McMurtrie Re: " but competitors will pop up everywhere to take a cut."

      It may in fact already be happening. Instagram "stories" appears to be beginning to take a significant bite out of Snapchat's lunch if what some of the "celebs" are saying about the change in how many are following them on which app is to be believed.

  5. Sir Barry

    Congrats!

    I would like to offer my congratulations to Snapchat. they have managed to create a business model where investors will throw a lot of money at them and then not complain when there are no profits.

    Pure Genius

  6. Michael H.F. Wilkinson Silver badge

    Apparently, profit is so twentieth century

    OK, I am in no way an economist or financier, but I am good at mathematics. The only "rationale" I can see to buy shares that do not promise to yield any dividend (due to lack of profits) is to gamble that the share price will go up. This assumes that there are more people that will prepared to make that gamble, because that is the only rationale to buy these shares. The moment people no longer assume the share price will go up the value will automatically come crashing down. This suggests that like with a pyramid scheme, only the initial investors have any chance of making money. Of course, it is not a pyramid scheme per se, but it is getting close, and I wouldn't touch these shares with a 20 foot pole

    1. Version 1.0 Silver badge

      Re: Apparently, profit is so twentieth century

      It doesn't matter, people will buy the shares. You see, it's not the shares that make the money - it's that sale of the shares that holds the secret. There's a commission paid to the bank when you buy the shares, and another commission when the shares tank and you try to sell them.

    2. DeVino
      Trollface

      Re: Apparently, profit is so twentieth century - I disagree !

      Older and sadly wiser folk might remember dot-bomb in the nineties.

      Different millennium, same old nonsense.

  7. Doctor Syntax Silver badge

    Simple

    They're hoping to be bought out by Goggle, Farcebook, Twatter, MS or whoever.

  8. Anonymous Coward
    Anonymous Coward

    Correct me if I'm wrong, but...

    It doesn't matter if they'll never make a profit as a company, the Venture Capitalists will get their money back via the over-inflated IPO.

    That's the game for them, invest in a company, then get stinking rich from the IPO and then let all the plebs lose their shirts when the share price crashes.

  9. IHateWearingATie
    FAIL

    Words fail me

    A company the underpants gnomes would gave been proud of

    1. Anonymous Coward
      Anonymous Coward

      Re: Words fail me

      They are smarter than the gnomes, they removed step 3 (profit) so 2 becomes irrelevant...

  10. Aaiieeee
    Angel

    If you don't like having money

    ..then please send it to me!

    Oh wait, thats exactly what this IPO is for.

  11. Anonymous Coward
    Anonymous Coward

    Value for money

    "the self-described "camera company", which is valued at about $25bn," and has 158 million users thus valuing each user at $158 (a pleasing symmetry however meaningless.).

    I wonder how my use of this crowd pleaser could be worth even a few dollars let alone 158 of them but then I am not a financial genius come Master of the Investment World. I am sure someone will make a profit out of this IPO.

    1. Version 1.0 Silver badge
      WTF?

      Re: Value for money

      $25bn? I think you'd get a much better return for the investment if you bought Iceland instead, plus you'd have money left over for product development.

      1. Paul Crawford Silver badge

        Re: Value for money

        The country or the frozen-food chain?

  12. Richard Jukes

    There is no product. There is no revenue stream. And just how do they spend close to a billion a year?

    Its nuts. And the sad thing is, it will probably float and sky rocket, then get brought out by someone and be nothing but a burden.

    I despair, I truly do.

  13. Alistair
    Windows

    $158 per user for ....... a toy that makes weird pictures

    IPO!! 25 BEEEELION DOLLAR COMPANY. (loosing money every day!)

    " I am sure someone will make money off this IPO "

    Quite certain <investment bank of some idiots choice > will be making a TON of money out of the IPO. The VC's will get back their investment and about 22%. 15 days later the 'ads' in snapchat will become intrusive and annoying, but will generate more revenue. 45 days later an accountant somewhere in snapchat will discover that 37% of the users have 11 accounts not 1. Ninety days after the IPO the company will be revalued "by the market" to 2.5 billion dollars, the share price will drop to 1/15th of the IPO.

    Sound familiar?

  14. &rew
    Joke

    It isn't a loss...

    ... it's an Alternative Profit.

    1. allthecoolshortnamesweretaken

      Re: It isn't a loss...

      I don't have debts, my capital-asset ratio is negative.

  15. CrazyOldCatMan Silver badge

    Hmm..

    Snap Inc. says it made $404.5m last year

    "Response code 404.5 - profit not found"

  16. rtb61

    Problems With Saturation Advertising

    All the advertising companies are going to suffer badly in the future. The problem with saturation advertising it all becomes nothing more than a sea of bullshit to which everyone holds their nose and pretends does not exist. Changes in shopping habits, bullshit names put me right off, gradmas anything is a do not by or nana, or uncle or any other bullshit sounding name, closest thing to gradma from those shite companies is the psychopath tranny corporate CEO with his testicles on a night stand alongside his bed, just eww.

    Also off the list are any products that scream at me like some crazed busker inside my home, your product is dead, as far as I am concerned, also all the bullshit associations, no you product will not make my dick longer or hard or anything what so ever, it will just make the rest of me bored senseless.

    When producers realise that saturation advertising is failing big time and a complete waste of money, those advertisers, many in hock up to the eyeballs as the executive teams steal as much money as fast as they can, will go belly up.

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