> Three years ago this month, as Snap Inc. went public, NBCUniversal announced that it had invested $500 million in the company.
Not sure why you would invest in Snap at their IPO price at $17, given that they had no prospect of profitability or any signal of growth due to Instagram's aggressive copying strategy at the time.
Compared to three years ago, $10 is a bargin, but no better than the $5 price in early 2019. Better wait for it to enter single digits.
Of course if they had known it would have fallen to $5, they would have waited. Anyone would have. But nobody has the fortune to invest with 20/20 hindsight
I'd like to see how many tech companies are showing a profit when they IPO.
ALso, 500M is a lot of money but it's not THAT much money when you're running a multi-billion dollar company and responsible for delivering billions in revenue. To get those numbers you have to invest in things. NBC isn't sitting around wondering if they can eek out another million dollars of ad buys for the TODAY show this quarter.
I think the major tech companies aka Apple, Google, Microsoft, or even Facebook and Oracle etc where all profitable at IPO. You might get a lot of unprofitable tech IPO’s, but they are less likely to last and thus grow.
There’s a huge difference between having the foresight to say this is risky and predicting it will crash to $5 in 372 days. One is prudent investing the other is gambling.
I totally agree. Maybe there are different degrees of gambling ie informed vs blind, but it is all gambling. Unless you are talking about fixed income.
>Not sure why you would invest in Snap at their IPO price at $17, given that they had no prospect of profitability
That's typical of social media companies - get users first, and figure out the money later. And it makes sense. If you have a billion active users on your platform, you can always find ways to make money.
>due to Instagram's aggressive copying strategy at the time.
Everyone copies everyone in this space and always has.
I never understand the "Quietly" part in headlines like this. The fact that it's headline news is kind of self-refuting, and even without that, where do people usually shout about the positions that they're selling?
Except $500M barely register for a company the size of NBCUniversal; it is not "quite a large sum of money" for them at all. Their yearly revenue are above 30 Billions.
The quietly part makes it sound more scandalous or suggestive, which drives clicks to an otherwise boring story.
The only time I see people shout about positions they're selling, is when they absolutely have to unload in a hurry, so they go max wide on the potential buyer attention campaign. Magic Leap's recent public humiliation / desperation, is an example of this in action.
It's part of the headline newsspeak bingo game. My personnal dislike is to "this SLAMS that". It's one of the many many reason why news sites lose value and identity, everything is instant, everything is a big news, everything is written in a way that shocks to get clics and views, and the actual information comes second place.
> I never understand the "Quietly" part in headlines like this. The fact that it's headline news is kind of self-refuting
It was in Comcast's quarterly report filed on January 31st, but even then it would need to be compared to the prior quarterly report 3 months earlier. So nobody - with write access to any website - noticed until March 9th.
> and even without that, where do people usually shout about the positions that they're selling?
Form 3
Form 4
Form 13F
Anyway, NBC was not within reporting thresholds for Snapchat.
This is both a financial ("will this investment make money?") and a signaling ("what does (not)owning Snap say about us?") decision.
They say "quietly" because NBCU didn't publicize this at all, suggesting that they liked the signal of buying Snap, but no longer like the financial investment.
You could compare this to Sequoia walking away Finix two days ago[1], where Sequoia wanted to be very loud and squash the financial signal by letting Finix keep the money.
Without contradicting your general point, Spiegel’s bet worth is so illiquid (so solid? :) ) that I’m not sure what it really would be if he wanted to get cash out
I'd guess that a lot of the offer was in SO. so also illiquid. Though FB stock is worth way more than Snap stock so he probably made the wrong choice, but who knows.
FB is less illiquid than SNAP for Evan. If he sells 50% of his SNAP shares, people will get concerned about his investment in the business. A mid-level exec (or even high profile acquisition) selling a bunch of FB stock doesn’t affect the price much.
But he probably likes running the company more than he’d like the extra money.
In 2014 FB stock was $20/share. Now its closer to $200/share, so a $3B offer in 2014 roughly translates to a $30B valuation today. From the financial side it appears that Snap made the wrong choice.
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[ 2.3 ms ] story [ 110 ms ] threadNot sure why you would invest in Snap at their IPO price at $17, given that they had no prospect of profitability or any signal of growth due to Instagram's aggressive copying strategy at the time.
Compared to three years ago, $10 is a bargin, but no better than the $5 price in early 2019. Better wait for it to enter single digits.
There is some overlap between it and Snapchat for short-form media.
ALso, 500M is a lot of money but it's not THAT much money when you're running a multi-billion dollar company and responsible for delivering billions in revenue. To get those numbers you have to invest in things. NBC isn't sitting around wondering if they can eek out another million dollars of ad buys for the TODAY show this quarter.
That's typical of social media companies - get users first, and figure out the money later. And it makes sense. If you have a billion active users on your platform, you can always find ways to make money.
>due to Instagram's aggressive copying strategy at the time.
Everyone copies everyone in this space and always has.
If they had perfect knowledge of the future...
Since it was in Comcast's quarterly report, it was large enough to "register".
The only time I see people shout about positions they're selling, is when they absolutely have to unload in a hurry, so they go max wide on the potential buyer attention campaign. Magic Leap's recent public humiliation / desperation, is an example of this in action.
Is Mexico in talks with the US about drug cartels?
Are you chicken nuggets covered in covid-19?
Is Trump ritualistically sacrificing children in the oval office?
They're leaving it up in the air, so you can't call them on writing garbage they barely try to back up.
https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline...
It was in Comcast's quarterly report filed on January 31st, but even then it would need to be compared to the prior quarterly report 3 months earlier. So nobody - with write access to any website - noticed until March 9th.
> and even without that, where do people usually shout about the positions that they're selling?
Form 3 Form 4 Form 13F
Anyway, NBC was not within reporting thresholds for Snapchat.
They say "quietly" because NBCU didn't publicize this at all, suggesting that they liked the signal of buying Snap, but no longer like the financial investment.
You could compare this to Sequoia walking away Finix two days ago[1], where Sequoia wanted to be very loud and squash the financial signal by letting Finix keep the money.
[1] https://news.ycombinator.com/item?id=22527943
The IPO of Snap raised $3.4 billion w a valuation of $24 billion.
Evan Spiegel has (maybe not this month) a net worth of over $2 billion.
Zuck was offering $3 billion.
But he probably likes running the company more than he’d like the extra money.
Very different situation for Jack Dorsey w/ Twitter.