Jake Ruth
Product Engineer at PostHog, Co-Founder of Stock Unlock (YC W22), AI Engineering
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 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 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'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 is a red flag that does not put shareholders' interests first. Its growth comes mainly from countries with low pricing power while it plateaus or declines in the West. It has long diluted shareholders in a way that enriches its founders, and the CEO and his co-founder control over 90% of voting rights, leaving shareholders powerless. It should have been acquired when it had the chance. @Ashton_1nvests sees a path from about $6 to $20 or more. x.com
Snap's stock-based compensation is the main problem, and its CEO is a further negative. 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 is an eternal value trap: cheap on paper, but weighed down by regulatory headaches, TikTok eating its lunch and endless dilution. 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'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 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
