Jordan
Long-Term Stock Investor, Compounding & Portfolio Construction
Snap is not investable until at least a change in management. Per @HatedMoats, Meta and Google have tried to buy Snap for years, even at 3x its value, and been refused each time. The CEO, who owns about 10%, should take a sale at the right price, such as $30B, or risk being left with nothing. x.comÂ
Snap's problem is its management, which can't be replaced because founders hold super-voting shares. The business doesn't need reinventing, only better monetization of existing users and continued cost cuts, but that requires new leadership. x.comÂ
Snap's stock-based compensation is the main problem, and its CEO is a further negative. x.comÂ
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.comÂ
Snap is one of the worst-run public companies relative to its potential, and CEO Evan has proved he is terrible at creating shareholder value. Stock-based awards to the board and over 5,000 employees dilute shareholders about 4% a year. Per @WOLF_Financial, Q1 EPS missed at -$0.05 versus $0.09 expected, the EBITDA guide fell short and Snap ended its Perplexity deal. It is not a dead company, but there are many better opportunities. x.com x.com x.com x.comÂ
Snap has enriched insiders at shareholders' expense, with insiders paying themselves $11 billion since IPO against a market cap of just $8 billion today. Forcing out Evan Spiegel and cutting the endless stock-based compensation would earn it a chance, and the potential to turn the ship around is real. x.com x.com x.com x.comÂ
Snap should work because CEO Evan Spiegel needs access to capital to get where he wants to go, which requires shareholder alignment; the plan does not work without either. A replier adds that getting Specs to market requires a high stock price. x.comÂ
Snap is an eternal value trap: cheap on paper, but weighed down by regulatory headaches, TikTok eating its lunch and endless dilution. x.comÂ
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.comÂ
Snap looks very interesting as a long-term buy at a forward P/E of 6 and a PEG of 0.21. Growth is expected near 10% for the next two years, with positive earnings expected from next year. x.comÂ
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.comÂ
