We are about to get a very insider opinion on just how well SNAP is doing.
I mean if there's a huge deluge of shares coming available for trading on lock up expiry date then that's can be taken as a pretty bearish sign that employee's don't like where the company is going.
Are employee's going to be scrambling to cash out on the first day or are they gong to hold onto their shares because they feel they'll be worth much more in the future?
SNAP did just start having options trading for it so that should help a bit to relieve the short pressure.
> Traders also own more bearish put options than bullish call options, with put open interest being about 70 percent larger than the number of calls outstanding Wednesday, data compiled by Bloomberg show.
This actually seems just as important as the short exposure.
EDIT Just so I don't sound like a heartless ass.... No one is saying employee's should sell stock and diversify, that's just prudent.
But there is a huge difference from employees selling 20% of their holdings vs 50%+ on the very first day/week they are allowed to sell.
> if there's a huge deluge of shares coming available for trading on lock up expiry date then that's can be taken as a pretty bearish sign that employee's don't like where the company is going.
Is it really? If a large portion of your net worth is in shares of a single company that you also work for, wouldn't it make sense to sell your shares even if you think the company is going to do well?
Depends on how you time it and what you think the prospects are. Skittish Facebook employees missed out on a quadrupling of value if they sold in the first six months.
I think there's a reasonable thing to add and that's risk.
I might be more willing to accept a guaranteed £X than a 20% chance of a £10 * X payout, depending on the X. My personal investment philosophy generally would recommend pulling out large single investments into broader funds even though the potential top payout drops.
Keep in mind facebook employees are not in any way/shape/form "halfway decent traders". The halfway decent trader group will take profit off the table the moment they can - if at some later time it looks like there is a profitable long position to be had then they take it. Amateurs take/hold positions when there is nothing happening at that moment.
tldr; You don't hold something because you think it will go up. You open long when it is going up and you think it will continue. The reason for the 90/90/90 statistic is because of mindsets like those facebook employees you mention.
Exactly. Most SNAP employees with significant stock grants are likely talking to financial advisors, and the boilerplate message from financial advisors is "hold if you're already idependently wealthy, diversify otherwise". Too many stories of employees getting the short end of the stick after the IPO (GRPN, ZNGA, LC, TWTR).
Alternatively people want to take some risk off the table - and hedge their options. A lot of employees are going to have a lot of money locked up in SNAP options and this let's them "diversify" the risk.
Lockup expiry is always a scary time. The same stuff happened to Facebook combined with mobile monitization and user growth fears made the stock tank to the 40s.
Though these are two very different companies. Best of luck to owners of Snap stock.
Trading is an echo chamber full of self-fulfilling prophecies since forever. The fun thing is that there are so many of these prophecies are around that they usually cancel out.
"A growing number of traders IS betting Snap’s stock price will fall"
Pointless pedanty on my part, no doubt, but I believe there are lots of people here trying to improve their English. The verb is "is" because the subject of the sentence is "number" (not "traders").
Actually, the verb should be plural and the title "A growing number of traders are betting..." is correct. See the Oxford Dictionaries website for reference:
Let me fix this for you, from the perspective of a profitable trader.
"A growing number of traders are betting..."
"A growing number of suckers are betting..."
They are suckers for betting. Coin flip traders provide liquidity on the ride to the cleaners. I hope they don't stop doing so though, because then it might actually be difficult to profit from them.
An example will explain it better though.. Imagine a random trading instrument, any will do. The bid is $100, the ask is $101. Say there are 50 bids showing, and 500 asks. At first glance, this looks like it's prime for selling..enter the coin flip traders. They sell it 5, 10, 20 contracts at a time, all small lots. Magically though the bid sits at 50 no matter what the retail traders throw at it...
That's the coin flip traders at work, selling into what looks like a weak market. I'm the 50 bid at $100(and I'm 400 of the 500 asks at $101, but you don't know that yet), and my order is set to keep stacking up to 1000-2000 bids, all while keeping the shown number under 50(as in, if you sell 5 of them, I'll add 5 more to stack the bid back to 50). Once the coin flip traders get tired of selling, or I get tired of waiting, I'll pull my 400 orders off the ask, so now it shows 100. Then I'll throw 1500-2000 at the ask, and push the price up 4 ticks - right into your average retail coin flipper's stop loss...now those sellers become buyers whether they like it or not, and the market goes in my direction.
Rinse and repeat, rinse and repeat, rinse and repeat... as long as suckers show up to play, pros will be waiting to play them. I'm not one of those pros, I'm just the guy riding along their coat tails. I'm a very small fish, and there are massive sized whales doing the same thing with 500 to 1000 times the leverage I have. They also can afford to play more "tricks" on the coin flip traders. In that example scenario, someone bigger than me will actually drop the market against themselves 2 to 3 more ticks, encouraging suckers to sell into it before yanking the rug out from under you. Only retail coin flip traders fall for this though, the pros and the banks see what is going on, and will join in on the side against the retail lots. The reason they are picking on the retail people is because retail stops are predictable - average guy holding Facebook or Snap or anything else can't afford for the market to move against them much and will place their stops shallow as a result. The pros and banks can take more pain though, so they are harder targets. If it only takes 5mil of leverage to stop out retail, but it takes 50mil of leverage to stop out the pro/bank making the play, which do you think they will pick? The 5mil for the low hanging fruit.
You can sum all this up as... if you aren't trading every day, for <X> years of your market: don't do it. The odds are orders of magnitude worse for amateurs than the loosest casino in Las Vegas. Calling it a coin flip is probably a disservice, because your odds are way less than 50%. You are going to lose, and you are going to lose quickly.
As a native English speaker I disagree with this pedantry. It's correctly plural.
Dictionary.com says:
Usage note
2. As a collective noun, number, when preceded by a, is most often treated as a plural: A number of legislators have voiced their dissent. When preceded by the, it is usually used as a singular: The number of legislators present was small.
"Number of" is a prepositional phrase that qualifies the noun "people." "Number" is not the subject but rather "traders" is and so the verb agrees with traders.
Another example:
"A large number of people are gathering." "A large number" isn't the thing doing the gathering the people are.
Prepositional phrases are easy to spot. This a good quick read:
The key point is that "a prepositional phrase will never contain the subject of a sentence."
A simple mnemonic device kids are taught to identify prepositions is the "preposition mountain":
On the mountin, of the mountain, from the mountain, in the mountain, under the mountain, by the mountain, along the mountain. If it's logical in relation to "the mountain" it's probably a preposition.
It's worth nothing that there are many native English speakers that get these wrong :)
Haha. A while back I searched HN for the Facebook share price drop posts and those were "No shit!" too. Turns out everyone's really good at predicting the present.
Anecdotally my one Snap user data point has been wooed by Instagram Stories.
Insta seems to be the juggernaut in the media stream space. It's not clear to me how Snap competes since Insta isn't some crufty Suite like Facebook or Microsoft. They can radically change the UI just as easily as Snap to keep up with needs. The underlying tech is all known concepts.
Maybe Snap can differentiate in some kind of AR features, but they're really just scraping by there with a fairly minimal offering. Still, that's where I guess I would focus if I were them: great creator authoring UIs, and advanced psuedo-authoring (filter long tail) for end users.
Hard to argue you're going to beat Insta on filters tho.
Edit: oh yeah, Snap can win a segment on privacy. Although Facebook seems like a more natural place for friends-only stuff. Snap has to fight network effects there.
The primary focus of Instagram is achievement broadcasting.
The primary focus of Snapchat is messaging.
Snapchat's messaging platform is also heavily gamified. There are a lot of very clever psychological incentives to continue using the platform on a daily basis, which drives user engagement through the roof.
Instagram's messaging platform feels bolted-on, secondary. I would never consider using Instagram as a primary method of communicating with someone, but I use Snapchat as a primary method of communicating with people on a daily basis.
Snap is basically the only social network I use at this point (except IRC, if you count that), mostly because it's fairly trivial and fun (same as IRC :).
Take stupid pictures, draw stupid crap on top, send it to a "chat room", forget about it forever. To me SnapChat is a chat app with some cool multimedia features. I never ever use stories (the feature Instagram has notoriously cloned). Other than marketers, who is using stories? Very few of my friends do.
Instagram seems like douchey lifestyle porn to me. For example, the presence of "likes" is very off-putting to me. I can't be the only person with this brand association.
Snap is worth a tiny fraction of facebook, just as facebook is worth a tiny fraction of Google when comparing global numbers in users and revenue. It all makes sense.
Are you sure? Facebook doesn't seem to be a tiny fraction of Google in any of the comparisons. For profit, FB is looking to get to $1B/month in a few months, while Google has topped $2.5B/mo and is looking to get to $3B/mo. That's just 3x. Sure Google's revenue is more than 3x. If I had to make an educated guess, I'd say it's 5x as much. Whether you're talking just Facebook and Google for global users or including their subsidiaries, neither would have FB as a tiny fraction. FB already does 2B monthly users. Google likely isn't even double that just based on the number of internet users outside China.
You didn't respond to the comment reply to you so I'll repeat - many users overlap. My original point stands - FB at 2B users monthly means they can't possibly be a tiny fraction because of the current amount of internet users especially when Google doesn't have a dominant share in China.
Plus you brought in other products/subsidiaries so then we have to include:
Messenger - 1B+ users
WhatsApp - 1B+ users
Instagram - 750M users
Of course I know the overlap is huge. Do you recognize you're wrong, is that why you didn't respond? That's fine then of course.
you have to have a risk management strategy, you cannot hold the majority of your net worth in one single company, no mater if it is Berkshire Hathaway, Apple or something else...
If you want a real insider look at Snap, try living in Venice Beach for a few months, and try to get a feel for how Evan specifically spends his time. There are many red flags.
To me the problems in Venice speaks to their staggering growth so it's probably a good signal of their ambition.
However, I did not like that mostly wasted retail space they had on the Venice boardwalk to show off their new glasses. The workers seemed bored, the security seemed bored, probably because no one was really approaching the displays. Seems like a huge waste of money and completely out of place with the vibe on the beach. If anything it reinforced to the average person walking by the typical perception of tech companies as careless elites bent on displacing the fringe classes.
> The EMH means the lock-up expiration is already priced into the stock
There are various forms of the efficient market hypothesis. The weak form holds that all public information is efficiently priced into the market. The insiders selling on lock-up expiration have access to non-public information. Such non-public information could range from firm-level material, e.g. state of hiring or product development, to individually material, e.g. that an employee is in debt or really wants to go on vacation.
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[ 2.0 ms ] story [ 196 ms ] threadI mean if there's a huge deluge of shares coming available for trading on lock up expiry date then that's can be taken as a pretty bearish sign that employee's don't like where the company is going.
Are employee's going to be scrambling to cash out on the first day or are they gong to hold onto their shares because they feel they'll be worth much more in the future?
SNAP did just start having options trading for it so that should help a bit to relieve the short pressure.
> Traders also own more bearish put options than bullish call options, with put open interest being about 70 percent larger than the number of calls outstanding Wednesday, data compiled by Bloomberg show.
This actually seems just as important as the short exposure.
EDIT Just so I don't sound like a heartless ass.... No one is saying employee's should sell stock and diversify, that's just prudent.
But there is a huge difference from employees selling 20% of their holdings vs 50%+ on the very first day/week they are allowed to sell.
Is it really? If a large portion of your net worth is in shares of a single company that you also work for, wouldn't it make sense to sell your shares even if you think the company is going to do well?
I might be more willing to accept a guaranteed £X than a 20% chance of a £10 * X payout, depending on the X. My personal investment philosophy generally would recommend pulling out large single investments into broader funds even though the potential top payout drops.
tldr; You don't hold something because you think it will go up. You open long when it is going up and you think it will continue. The reason for the 90/90/90 statistic is because of mindsets like those facebook employees you mention.
IMO, as soon as you can reasonably take 5 million of the table do so. Taking risks after that is plenty rational.
Though these are two very different companies. Best of luck to owners of Snap stock.
https://cdn.shopify.com/s/files/1/0060/6102/products/book_bu...
Pointless pedanty on my part, no doubt, but I believe there are lots of people here trying to improve their English. The verb is "is" because the subject of the sentence is "number" (not "traders").
https://en.oxforddictionaries.com/explore/number-of-people-i...
"A growing number of traders are betting..." "A growing number of suckers are betting..."
They are suckers for betting. Coin flip traders provide liquidity on the ride to the cleaners. I hope they don't stop doing so though, because then it might actually be difficult to profit from them.
An example will explain it better though.. Imagine a random trading instrument, any will do. The bid is $100, the ask is $101. Say there are 50 bids showing, and 500 asks. At first glance, this looks like it's prime for selling..enter the coin flip traders. They sell it 5, 10, 20 contracts at a time, all small lots. Magically though the bid sits at 50 no matter what the retail traders throw at it...
That's the coin flip traders at work, selling into what looks like a weak market. I'm the 50 bid at $100(and I'm 400 of the 500 asks at $101, but you don't know that yet), and my order is set to keep stacking up to 1000-2000 bids, all while keeping the shown number under 50(as in, if you sell 5 of them, I'll add 5 more to stack the bid back to 50). Once the coin flip traders get tired of selling, or I get tired of waiting, I'll pull my 400 orders off the ask, so now it shows 100. Then I'll throw 1500-2000 at the ask, and push the price up 4 ticks - right into your average retail coin flipper's stop loss...now those sellers become buyers whether they like it or not, and the market goes in my direction.
Rinse and repeat, rinse and repeat, rinse and repeat... as long as suckers show up to play, pros will be waiting to play them. I'm not one of those pros, I'm just the guy riding along their coat tails. I'm a very small fish, and there are massive sized whales doing the same thing with 500 to 1000 times the leverage I have. They also can afford to play more "tricks" on the coin flip traders. In that example scenario, someone bigger than me will actually drop the market against themselves 2 to 3 more ticks, encouraging suckers to sell into it before yanking the rug out from under you. Only retail coin flip traders fall for this though, the pros and the banks see what is going on, and will join in on the side against the retail lots. The reason they are picking on the retail people is because retail stops are predictable - average guy holding Facebook or Snap or anything else can't afford for the market to move against them much and will place their stops shallow as a result. The pros and banks can take more pain though, so they are harder targets. If it only takes 5mil of leverage to stop out retail, but it takes 50mil of leverage to stop out the pro/bank making the play, which do you think they will pick? The 5mil for the low hanging fruit.
You can sum all this up as... if you aren't trading every day, for <X> years of your market: don't do it. The odds are orders of magnitude worse for amateurs than the loosest casino in Las Vegas. Calling it a coin flip is probably a disservice, because your odds are way less than 50%. You are going to lose, and you are going to lose quickly.
Dictionary.com says: Usage note 2. As a collective noun, number, when preceded by a, is most often treated as a plural: A number of legislators have voiced their dissent. When preceded by the, it is usually used as a singular: The number of legislators present was small.
"a growing number of traders" => "they", so "are" is correct.
"the growing number of traders" => "it", so "is" is correct.
Another example:
"A large number of people are gathering." "A large number" isn't the thing doing the gathering the people are.
Prepositional phrases are easy to spot. This a good quick read:
http://www.chompchomp.com/terms/prepositionalphrase.htm
The key point is that "a prepositional phrase will never contain the subject of a sentence."
A simple mnemonic device kids are taught to identify prepositions is the "preposition mountain":
On the mountin, of the mountain, from the mountain, in the mountain, under the mountain, by the mountain, along the mountain. If it's logical in relation to "the mountain" it's probably a preposition.
It's worth nothing that there are many native English speakers that get these wrong :)
From http://www.chompchomp.com/terms/prepositionalphrase.htm :
>At the minimum, a prepositional phrase will begin with a preposition
"number" is not a preposition.
The prepositional phrase is "of traders".
"A growing number of traders is causing better liquidity for SNAP stock"
I predict I'm going to steal this quote.
Insta seems to be the juggernaut in the media stream space. It's not clear to me how Snap competes since Insta isn't some crufty Suite like Facebook or Microsoft. They can radically change the UI just as easily as Snap to keep up with needs. The underlying tech is all known concepts.
Maybe Snap can differentiate in some kind of AR features, but they're really just scraping by there with a fairly minimal offering. Still, that's where I guess I would focus if I were them: great creator authoring UIs, and advanced psuedo-authoring (filter long tail) for end users.
Hard to argue you're going to beat Insta on filters tho.
Edit: oh yeah, Snap can win a segment on privacy. Although Facebook seems like a more natural place for friends-only stuff. Snap has to fight network effects there.
The primary focus of Snapchat is messaging.
Snapchat's messaging platform is also heavily gamified. There are a lot of very clever psychological incentives to continue using the platform on a daily basis, which drives user engagement through the roof.
Instagram's messaging platform feels bolted-on, secondary. I would never consider using Instagram as a primary method of communicating with someone, but I use Snapchat as a primary method of communicating with people on a daily basis.
Take stupid pictures, draw stupid crap on top, send it to a "chat room", forget about it forever. To me SnapChat is a chat app with some cool multimedia features. I never ever use stories (the feature Instagram has notoriously cloned). Other than marketers, who is using stories? Very few of my friends do.
Instagram seems like douchey lifestyle porn to me. For example, the presence of "likes" is very off-putting to me. I can't be the only person with this brand association.
Correct me if I'm wrong.
- Gmail billions
- Android 2B
- Search billions
and the list goes on Now think about its hardware efforts on developing TPU's for AI.
Here's how billions of people use Google products, in one chart http://www.cnbc.com/2017/05/18/google-user-numbers-youtube-a...
Plus you brought in other products/subsidiaries so then we have to include:
Messenger - 1B+ users
WhatsApp - 1B+ users
Instagram - 750M users
Of course I know the overlap is huge. Do you recognize you're wrong, is that why you didn't respond? That's fine then of course.
To me the problems in Venice speaks to their staggering growth so it's probably a good signal of their ambition.
However, I did not like that mostly wasted retail space they had on the Venice boardwalk to show off their new glasses. The workers seemed bored, the security seemed bored, probably because no one was really approaching the displays. Seems like a huge waste of money and completely out of place with the vibe on the beach. If anything it reinforced to the average person walking by the typical perception of tech companies as careless elites bent on displacing the fringe classes.
There are various forms of the efficient market hypothesis. The weak form holds that all public information is efficiently priced into the market. The insiders selling on lock-up expiration have access to non-public information. Such non-public information could range from firm-level material, e.g. state of hiring or product development, to individually material, e.g. that an employee is in debt or really wants to go on vacation.