DVB
Deep-Value Investor, Ex-Tech Executive, Agentic Equity Research Builder
Snap is easily the worst software company at the worst time, needing over 5,000 employees to maintain a chat app. Its stock compensation and operating expenses are designed to enrich founders, executives and employees, not shareholders. Per @WOLF_Financial, Q1 EPS of -$0.05 missed the $0.09 estimate, Q2 EBITDA guidance trailed estimates and the Perplexity deal ended. Betting the company on AR glasses with that workforce is not convincing. x.com x.com x.com x.com
Snap's new Specs AR glasses are a horrendous product design that no one will ever wear, and no one around CEO Evan Spiegel will tell him so. @StockSavvyShay notes the reveal helps explain how Snap can be down over 90% during one of tech's best bull markets. Snap remains a lesson on hot IPOs and one of the biggest dog stocks ever. x.com x.com
Snap is a weak company because of CEO Evan Spiegel's product judgment. Its new Specs AR glasses, shown publicly for the first time, look so unappealing that they may be the first product ever to launch and not sell a single unit. x.com x.com
Snap's Spectacles cannot deliver meaningful commercial value within five years, making a funding partner essential to avoid years of cash burn. At best, they are a prototype, with zero chance of profitability in the next couple of years; the glasses will never sell at the scale needed to make a difference. Without a partner, Snap stock is dead money. Even so, Snap remains a good asymmetric bet on Evan Spiegel changing course, with little downside from here if he does not. x.com x.com x.com x.com
Snap has been treated like an ATM by CEO Evan Spiegel, with no operating income a decade after going public. Its Specs glasses are unlikely to sell at meaningful scale for $2,200 each, and Snap badly needs executives capable of saying no to clearly horrible ideas. x.com x.com x.com
Snap's smart glasses will likely only hurt its core business. Unlike Meta, Snap cannot afford to invest billions in bets that may never pay off, and Meta should end up with a near-monopoly on smart glasses. x.com
Snap's core business is priced like a cyclical commodity company, with its Specs AR glasses thrown in nearly free. Revenue grew from $4.6 billion in 2023 to $5.9 billion in 2025 and free cash flow from $35 million to $437 million, and management aims to keep the diluted share count stable from 2027. Valuing Specs at about $1 billion leaves core Snap at roughly 7.3x trailing and 5.1x 2027 EV/EBITDA. Better-than-feared Specs teasers and Meta's AR push make the setup asymmetric. x.com
Snap's new AR glasses, priced at $2,195, are a poor sign for shareholders. x.com
Snap is undervalued, but management burning $4B+ on Specs is the biggest problem. At $2,000+ a pair, Specs are unlikely to go mass market: even 20M pairs, $40B of revenue and $10B of profit would be only a 150% ROI over 12 years, with under 1% odds of happening. Most shareholders would rather see $12-15B of revenue at 40% EBITDA margins with fewer employees and less dilution; Meta built a $1 trillion company on apps before spending on hardware. x.com x.com x.com x.com
Snap's Specs is the most misunderstood and undervalued part of the business. Snap has spent years building AR hardware and software and an ecosystem around them, which would be very difficult to replicate. x.com
Snap is uninvestable because nobody is going to wear its new smart glasses. A quoted post notes the stock has fallen for five straight years and the company is now trying to sell $2,500 goggles. x.com x.com