Dr J Rould
Full-Time Tech Investor, Quantum/Cybersecurity, Philosophy Background
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.com
Snap is now a bearish call because stock-based compensation didn't fall materially. That could flip if Evan Spiegel cuts SBC, with Google Cloud opex and monetization able to materially change the picture. x.com
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.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 could go to zero before Meta reaches $1,000, as its stock serves insiders more than shareholders. Snap has issued about $10B of stock-based compensation over the last decade, more than its roughly $8B market value, and CEO Evan Spiegel, who owns about 20%, has made about $1B in cash selling shares, per Google's Gemini, out of a roughly $2.5B net worth. x.com x.com x.com
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.com
Snap's new AR glasses, priced at $2,195, are a poor sign for shareholders. x.com
Snap is a textbook case of shareholder value destruction through failed execution, massive stock-based compensation and super-voting shares. Per TechCrunch, it is now spinning off its AI video team into a new company, Dotmo, because of high costs. 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 stock-based compensation is the main problem, and its CEO is a further negative. x.com
