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Snap is not the next Twitter it is worse than the latter

via:博客园     time:2017/8/22 15:31:00     readed:636


With the stock price continued to fall, Snapchat parent Snap is considered to be the next Twitter, but foreign media FOOL recently wrote that Snap is not the next Twitter, because it is even worse than Twitter.

The following is the full text of the article:

When the popular application Snapchat's parent company Snap listed in March, the outside world's first question is, Snap will become the next Facebook or the next Twitter? After all the two companies, but there is a world of difference.

In the five years of listing, Facebook grew to a technology monster, the market value of nearly 500 billion US dollars. Driven by up to more than 2 billion users, Facebook over the past 12 months gains of $ 33 billion in revenue and an astonishing $ 13 billion net profit.

On the other hand, Twitter is struggling. Its share price from the high point in 2013 fell nearly 80%, since the beginning of 2015 fell nearly 70%. Twitter at the time of the high valuation, coupled with its not to force the performance, resulting in a large number of investors wealth was evaporated. Today, Twitter's revenue is always hovering around $ 2.5 billion, with a net loss of nearly $ 500 million a year.

While Snap's share price has fallen 46% from a few months ago highs. Its subscriber growth is slowing, the cost is soaring, and the company seems to have no fight back in front of Facebook's plagiarism. Snap's trajectory seems like Twitter, in other words, it's not like Facebook.

But I think, Snap is not the next Twitter, its situation is far worse.

Burn black hole

I wrote an article in 2015 entitled "Twitter Stock is a poised disaster," which lists why Twitter is seriously overestimated. I will Facebook, Google and Twitter revenue comparable to the data were compared. The final figures are self-evident, showing that Facebook and Google are growing faster than Twitter, while achieving profitability and spending less on revenue.

Now, I added Snap to this comparison. For Snap, I will use its last 12 months of data and exclude it from the huge amount of IPO-related equity incentive expenses.

The past 12 months of Snap: revenue of 625 million US dollars, R & D expenses in the proportion of revenue in the 79.8%, sales and general affairs management expenses in the proportion of revenue in 92%, operating profit was negative 10.26 $ 83 million, the next year's revenue growth (based on analysts' average expectations) was 83%.

Twitter for 2014: $ 1.403 billion in revenue, 49.3% for R & D expenses in revenue, 57.3% for sales and general management expenses, and $ 539 million for operating profit , The next year revenue growth rate of 58%.

Google in 2003: revenue of 14.66 billion US dollars, R & D expenses in the proportion of revenue in 15.7%, sales and general affairs management expenses in the proportion of revenue in 17.7%, operating profit of 342 million US dollars, The next year revenue growth of 118%.

Facebook: revenue of 1.974 billion US dollars, R & D expenses in the proportion of revenue in 7.3%, sales and general affairs management spending in the proportion of revenue in 15.5%, operating profit of 1.032 billion US dollars, The next year revenue growth rate of 88%.

It can be seen that although Snap's revenue is not as high as Twitter in 2014, its operating loss is nearly twice as fast as Twitter. In addition, Snap costs are getting out of control: During the second quarter of 2017, Snap spent $ 255 million on R & D and $ 233 million in sales and general affairs management, both of which were higher than revenue for the same period (1.82 Billion dollars). Over the past few months, Snap has spent about $ 400 million on acquisitions.

These expenses coincide with the decline in Snap user growth. During the second quarter, Snap Day active subscribers grew by only 4%. Snap's network hosting costs are also growing, from an average of $ 0.6 per user in the first quarter to $ 0.61. Snap relies on cloud computing providers to provide a network infrastructure, which means that its hosting costs will grow with the use of the application.

For this year, analysts expect Snap will generate about $ 900 million in revenue. Even if the stock has been significantly down, Snap's market value is still about 18 times the number. To make this extremely optimistic valuation reasonable, Snap user growth needs to be accelerated, each user's revenue needs to be significantly increased, and the cost must no longer surge. So it can be said that as a listed company, Snap's current performance has no reason to let investors believe that the company can soar.

For investors, Twitter is a crash train, but I am not sure whether the metaphor is enough to describe the tragedy of Snap.

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