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From: Glenn Petersen4/19/2017 2:37:24 PM
   of 41
 
The tech world just witnessed a robbery. The heist was so brazen you kind of had to admire it, even if it was pulled off with all the grace of a gas station stickup.

Facebook barged into Snapchat’s happy Venice Beach, Calif., mansion, took a solid inventory of the goods, then lifted the crown jewels. First a version of Stories, the fun slide-show format that Snapchat created, appeared last year on Instagram, owned by Facebook. Then Snapchat’s features made their way to WhatsApp and Messenger, Facebook’s chat apps. A couple of weeks ago they got to the big leagues — Facebook’s main app — and the heist was complete.

Why Facebook Keeps Beating Every Rival: It’s the Network, of Course

Farhad Manjoo
New York times
APRIL 19, 2017



Credit Doug Chayka
______________________

The tech world just witnessed a robbery. The heist was so brazen you kind of had to admire it, even if it was pulled off with all the grace of a gas station stickup.

Facebook barged into Snapchat’s happy Venice Beach, Calif., mansion, took a solid inventory of the goods, then lifted the crown jewels. First a version of Stories, the fun slide-show format that Snapchat created, appeared last year on Instagram, owned by Facebook. Then Snapchat’s features made their way to WhatsApp and Messenger, Facebook’s chat apps. A couple of weeks ago they got to the big leagues — Facebook’s main app — and the heist was complete.

On Tuesday, the leader of the Facebook crew, Mark Zuckerberg, put on a conference to show off his loot. But he went further: He unveiled a vision of augmented reality — in which digital objects and effects are overlaid on images of the real world — which could undercut Snapchat’s mission to become the camera company for the next generation.

His speech had a lot of corny jokes, but that was just Mr. Zuckerberg’s way of hiding the shiv. In reality it was a performance that made plain Mr. Zuckerberg’s ruthlessness as a businessman. It also shows that he understands Facebook’s most important assets. Mr. Zuckerberg realized early on that the most important thing in his business was not necessarily creating the best new features. It doesn’t matter who invents digital mustaches. What matters is owning the biggest and most engaged network. And because he has the network, he always wins.

For years now, the world has been doubting Mr. Zuckerberg. Facebook, they said, would never beat Myspace. Then Facebook was going to get a run for its money from every other social network — Twitter, Pinterest and more. Hey, could it survive Google’s onslaught? Could it survive its own initial public offering? How would Facebook adjust to mobile? What about live video? And then there was Snapchat. By turning the smartphone camera into a communications platform, Snapchat created a novel and compelling social experience. Teenagers couldn’t get enough of it. And teenagers are the future. If Facebook lost teenagers, game over.

Hahaha. In the big picture none of these things really made a dent in Mr. Zuckerberg’s expanding kingdom.

Five years ago, after more or less cementing Facebook’s status as the world’s largest social network, he began to buy up and build future networks. He bought Instagram, which now has 600 million users. Then he bought WhatsApp, which has more than a billion users. Then he turned Facebook’s baked-in chat feature into its own chat app, Messenger, and now that, too, has a billion users.

He offered Evan Spiegel, Snapchat’s co-founder, $3 billion to buy that app. Mr. Spiegel refused — but perhaps he should have taken a closer look at the networks Mr. Zuckerberg was assembling.

Do you know what happens when you control four of the biggest social networks in the world? You get to stop worrying about competitors beating you on features.

Mr. Zuckerberg had done it before: Every time some other social company came up with social features that people seemed to enjoy — Twitter with the follower mechanism, Foursquare with checking in to stuff, Vine with short videos, Periscope and Meerkat with live video — Facebook or one of its subsidiaries (or all of them) could just copy and co-opt.

Mr. Zuckerberg didn’t win all of this stuff; sometimes the features turned out to be less important than initially thought, but that didn’t matter. At the very least he would neutralize his enemy’s growth, cutting it off before it became an existential threat to Facebook.



Mark Zuckerberg, Facebook’s chief executive, at its developer conference on Tuesday in San Jose, Calif. Credit Justin Sullivan/Getty Images

______________________

And that’s what we’ve just seen with Snapchat. There is a debate in the tech press about whether Facebook’s shrewd copying has killed Snap, Snapchat’s parent company, or simply wounded it. After all, last week Instagram said that 200 million people a day were using its Stories feature, which is more users than all of Snapchat (160 million at last count).

But that’s not the right question to ask. Snapchat could well survive, even thrive. The world is big; it can coexist with Facebook.

What’s important is that Facebook has forced this coexistence. Facebook’s billions of users will now be introduced to Snapchat’s best features on Facebook’s own platform, eliminating, for a lot of them, any reason to switch. There is essentially no chance now that Snapchat will eclipse Facebook anytime soon, if ever. In other words, Mr. Zuckerberg has done it again; he has neutralized yet another rival.

But there is another aspect to the power of large networks: They make other people’s features better.

During his speech on Tuesday, Mr. Zuckerberg previewed a slate of new tools to turn Facebook’s built-in camera into a platform that outside developers can add to and improve. Snapchat has made a hit out of augmented reality — the tech term for adding cartoony digital effects on your pictures and videos, like rainbow vomit pouring out of your mouth or dog ears on your head. But now Facebook, with its deep investments in artificial intelligence (which it uses to power all of its other apps) and its broad connections with developers (who want to get to its billions of users), will be in a far better position to advance those ideas.

“Even if we were slow to add cameras to all our apps, I’m confident that we’re going to be the ones who push this technology forward,” Mr. Zuckerberg said.

Let’s end with a note on the ethics of all this. Some of you may find it upsetting that a big company can just lift an innovation from a small company and run with it. If it’s not illegal, isn’t it at least something we should discourage?

Miranda Kerr, who is Mr. Spiegel’s fiancée, recently told The Times of London that she couldn’t stand Facebook’s behavior. “Can they not innovate? Do they have to steal all of my partner’s ideas?” she asked. “When you directly copy someone, that’s not innovation.”

To which I say: Meh. There are lots of different kinds of innovation in the tech industry. Coming up with something first is not the only kind.

There is a rich history in this industry of taking someone else’s idea and adding your own spin on it to improve tech for everyone. Apple’s Steve Jobs and the team behind the original Mac were inspired by a bunch of ideas floating around tech research circles, including at Xerox PARC. Then Microsoft’s chief executive, Bill Gates, saw the Mac’s success and — by creating a new business model for the PC industry — he ushered in an even bigger deal: graphical computers that could get cheap enough for most people to own

Or look at the smartphone. Apple created the iPhone, but if the tech industry had stopped there, smartphones wouldn’t have swept the world very quickly. Instead, Google more or less copied Apple’s software ideas in early versions of Android, and Samsung essentially copied Apple’s hardware. Economics kicked in, smartphones got really cheap, and they flooded the globe. And everyone did better: In time, Samsung hit on its own big idea — huge phones — that Apple copied, and Apple then made a bundle.

So let’s not get too hung up on copying. All’s fair in love and rainbow vomit.

nytimes.com

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To: Glenn Petersen who wrote (17)4/20/2017 5:23:03 PM
From: Intelim
   of 41
 
I'm surprised so many social media jumped on this "story" hype train.

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To: Glenn Petersen who wrote (18)4/21/2017 11:59:44 AM
From: Puru rama
   of 41
 

Consider Facebook's response to Snapchat, the upstart long range interpersonal communication application that is rivaling Facebook. The plan that Snap documented on Thursday for its $3 billion IPO uncovered the sheer measure of weight that Facebook and its Instagram backup are incurring on Snapchat's business. Back in August 2016, Facebook propelled Instagram Stories basically Snapchat's very own clone Stories include — even the name is the same. At the same time, Snapchat's client development slowed down out for the second 50% of the year, as uncovered in the S-1 recording. Snap accuses the plunge of specialized glitches, however, there's motivation to be wary.Snap Inc (NYSE:SNAP), long observed as the principal enormous first sale of stock (IPO) domino to drop in 2017, is currently open.

The SNAP stock cost opened at $17.00, however rapidly ascended by 41.2% at the open, shutting on its first day above $24.00 per share. Up until now, the SNAP stock figure is looking splendid.Snapchat, one of the hottest mobile messaging apps, has become a convenient and fun way to send photos and videos to friends and family without eating up your phone's memory. Launched in 2011, Snapchat allows users to add captions, drawings and filters to their photos and videos (also known as "snaps"). Unlike other messaging apps, you can view snaps for a maximum of 10 seconds, and then it's gone for good.Snap, the parent organization of online networking stage Snapchat, saw its stock tumble 9.8 percent Tuesday after a huge rally.The stock fell as much as 13.2 percent prior in the session.

The IPO is unusual in that investors aren't granted voting rights, with Reuters calls "an unprecedented feature that has raised concerns among corporate governance leaders that other high-valuation companies may follow suit and leave investors with little say over company operations." The price values Snap at a little under $24 billion, around the valuation of Google at the time of its IPO but far smaller than Facebook, which was valued at over $81 billion when it debuted, according to snap stock forecast. Facebook, which owns Instagram, announced Tuesday that it would be giving Instagram users the ability to send disappearing photos to a single friend or to a select group of friends, essentially Snap’s core function. Previously, disappearing messages were only a part of Instagram Stories, in photos or videos are visible to all of your followers.

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To: Puru rama who wrote (21)4/24/2017 4:30:34 PM
From: Intelim
   of 41
 
A fascinating read, thank you for sharing.

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From: Glenn Petersen4/29/2017 9:34:26 AM
   of 41
 
The world's biggest ad company plans to spend $200 million on Snapchat this year

businessinsider.com

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From: Glenn Petersen5/1/2017 5:01:20 PM
   of 41
 
Snapchat is stifled by its un-algorithmic feed

by Josh Constine ( @joshconstine)
TechCrunch
April 30, 2017



Snapchat invented its best products by being the anti-Facebook. Its disappearing chats made visual communication quick and casual compared to Facebook’s email-esque text messages. Stories ditched the likes and permanency so you could share your raw moments in the now, instead of just the life highlights that define you forever on your Facebook Timeline.

But now this “opposite of Facebook” orthodoxy is holding Snapchat back. After a brutal year of being copied by the world’s biggest social network, Snapchat might be wise to return the favor.

Twitter and Instagram prove out the algorithm

Twitter was once in Snap’s position. With slowing growth, it needed a big change to reinvigorate its aging app and make it easier for people who don’t browse tweets constantly. Twitter had always been the real-time firehose of commentary about what’s going on right now. Yet over the years, as users followed more and more accounts, their best friends and the best tweets were drowned in the rushing river of their purely reverse-chronological feeds.



Instagram sorts Stories algorithmically atop the screen
_____________________________

So Twitter made its most significant product update in years: it switched to algorithmic-sorting of its feed. Suddenly it didn’t matter if you followed a few noisy public figures or annoying oversharers, or if your favorite accounts only posted occasionally. Twitter began sifting out what you cared about most and showing it first.

The result has been Twitter’s first meaningful growth in many quarters,
adding 9 million users in Q1 2017. “We further refined the timeline to display a broader set of Tweets from a person’s network and applied deep learning models to show the most relevant Tweets first . . . These changes improved retention across both MAU and DAU” Twitter wrote in the quarter’s letter to investors.

Instagram pulled off a similar product coup this year. Previously it showed you every picture and video posted by people you followed in reverse-chronological order. Since these posts take up much more room in the feed, it was easy for one trigger-happy user on vacation or at an event to suddenly dominate the timeline and suppress everyone else. Meanwhile, it subtly discouraged people from posting multiple times per day for fear of having this spammy impact on their friends’ feeds.

Then
Instagram switched to a relevancy-sorted algorithmic feed. It’s growth rate spiked, sharing per user increased, and Instagram has added 200 million monthly active users since to reach 700 million.

In both cases, going algorithmic seemed antithetical to the core identity of the services, and long-time users vocally griped that their apps were ruined…but they weren’t. Twitter wants you to know what’s going on in the world. Instagram wants you to see what’s going on with your friends and interests. Both missions are better accomplished when you see the most relevant content first, no matter how often or little you open the apps.

Snapsort

Now it’s Snapchat that needs an algorithmic boost. On May 10th it will have its first earnings call, and all eyes will be on its daily active user count. Snap Inc will try to trumpet every other possible statistic: minutes spent in app per user per day, percentage of users who post each day, video views, revenue per user. But Wall Street wants scale, not just depth of engagement, and there’s a proven way to get it.



Snapchat sorts Stories reverse-chronologically
_________________________

Algorithmic sorting of Stories has propelled Snap copycat Instagram Stories to 200 million daily active users in 10 months — more than Snapchat’s whole app. Above the Instagram feed, you see the Stories of friends — not ranked by who posted most recently, but by who you care about most. That way it doesn’t matter if your best friends only post once per day, you only check once per day, and some “social media influencers” or professional photographers you follow add to their Stories non-stop. You always see what’s most likely to entertain you.

This sorting also enables Instagram Stories to employ auto-advance, showing one friend’s photos and videos after another in a constant stream. You can watch in descending order of relevance until you get bored, and be confident the Stories you didn’t get to are from people you care about less. If you only follow a small number of friends, your besties come first. If you follow a ton of celebrities or interest accounts, your favorites won’t get lost.

Compare that with the experience on Snapchat, and the fact that its growth rate declined by 82% to a trickle after Instagram Stories launched makes sense. Snapchat shows you the big list of Stories from people you follow in reverse-chronological order. Users who post most often dominate the top slots and your attention, regardless of whether you ever actually open and watch their Stories.

There might have been more benefit to the unsorted strategy when Snapchat was a smaller network. Reverse-chrono ranking makes it easy to see if any friends are doing something fun right this minute that you might want to join. And when Snapchat was still just for hip early-adopter teens, you might not have followed anyone you didn’t want to watch. But as Snapchat became the defacto teen messaging app and everyone that everyone knew signed up, courtesy and social contract obliged people to follow even their more boring acquaintainces. The network dilluted, and your favorite people started getting overshadowed by the rest.

Without algorithmic sorting, auto-advance meant you’d basically be haphazardly watching in order of whoever posted most recently, bouncing from distant acquaintances to celebrities to friends. So last year, Snapchat dropped auto-advance. That made the experience even worse, and much more laborious. Now you have to watch one person’s story at a time and then bounce back to the list to find more, or manually cobble together an adhoc Story Playlist that plays in sequence. You can’t just open Snapchat, tap the first story, and sit back and watch.



Snapchat’s growth slowed by 82% after it dropped auto-advance and Instagram Stories launched
______________________

It’s time for Snapchat to start caring less about time, and more about our relationships. Algorithmically sorting the feed based on whose Stories you typically watch and who you chat with could make it much easier to drop into Snapchat and immediately get the most delight per minute.

If Snap doesn’t want to suddenly throw away the old feed, it could leave a reverse-chrono list below the new algorithmic one. Or it could just create a “Best Friends” or “Favorites” or “Recently Watched” section above your Stories list that groups together what the algorithm would have shown first. That section could potentially auto-advance too.

While Snap is known to favor CEO Evan Spiegel’s instincts over data, the app should at least run some sizable tests to see how people react. Digiday reports that it spent 2016 talking to publishers about potentially ranking them with a curation algorithm.

But at that time, pre-Instagram Stories, Snapchat was flying high and didn’t need to fix what wasn’t broken. The game has changed since. Snapchat users might have asked for faster horses, but Instagram gave them the automobile. Snap needs to modernize. It can still be about living in the now even if that’s not what it shows first

techcrunch.com

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From: Glenn Petersen5/9/2017 4:15:12 PM
   of 41
 
Snapchat users stay loyal, but Instagram could block its growth


by Josh Constine ( @joshconstine)
TechCrunch
May 9, 2017




U.S. millennials and Gen Zs aren’t entirely replacing their Snapchat addiction with Instagram Stories, according to a dozen studies and surveys commissioned or collected by TechCrunch.

Yet the fact that 80 percent of Instagram’s users are outside the U.S. has helped propel Instagram Stories’ rapid ascent to 200 million daily active users last month, surpassing Snapchat’s 158 million users from Q4 2016. That could make it tough for Snapchat to significantly reverse its declining user growth rate as teens around the world who aren’t already on it may get their storytelling needs met on Instagram.

Facebook’s family of apps has failed to strike a fatal blow to Snapchat, but could still hinder its user growth, forcing Snap to focus on increasing time spent in its app and average revenue per user to expand its business.

Weathering the Instagram storm

Facebook launched the first shots of its all-out war on Snapchat in August, when Instagram prominently added a new feature above its feed. Instagram Stories is an exact clone of Snapchat’s 24-hour ephemeral slideshow Stories feature. At the time, we predicted that Snapchat loyalists would hold firm, but Instagram Stories’ convenient design in an already popular app and the existing social graph people had built there could make it good enough to deter new users from joining Snapchat.

In January, we issued our report that analytics companies and social media celebrities had seen a significant drop in Snapchat Stories views due to the launch of Instagram Stories and the removal of Snapchat’s auto-advance feature that automatically chains together friends’ Stories. It seemed likely that the competition and product change would lead to a decline in Snapchat growth rate.



A week later, when Snap Inc. filed to IPO, we learned that Snapchat’s growth rate had declined 82 percent since the launch of Instagram Stories. It gained just 5 million users in Q4 2016, to hit 158 million users.

Clearly Instagram was having an impact on Snapchat’s future, but the question was whether it would significantly rob Snap of its core U.S. millennial user base. That’s what we sought to determine with today’s collection of data sources.

Snapchat stumblesData suggests that Instagram has caused a decrease in usage of Snapchat, but that the startup is far from dead.

Analytics firm SimilarWeb found that the percentage of all Android devices with Snapchat installed peaked at 25.29 percent in October, shortly after Instagram Stories launched in August. That percentage has declined slightly, to around 23.5 percent.



The percent of U.S. Android users who are daily active Snapchat users peaked in May 2016 before Instagram Stories launched, and has declined roughly 11 percent since then. Snapchat has managed to increase time spent on its app 7 minutes, or 45 percent, over the past 18 months. But its swift growth rate turned into a decline after Instagram Stories launched, sinking from roughly 22 minutes before to a low of 19 minutes and 27 second after. Snapchat is now growing again and is currently at roughly 24 minutes.



Data company 7Park found that the number of Snapchat user sessions declined significantly among users who started using Instagram Stories. It also found the number of daily active Snapchat users declined faster amongst Instagram Stories users, according to the 14,000 people it studied. The launch of Facebook Messenger Day did not have the same impact on Snapchat.

Marketing analytics platform Captiv8 sees 57% of social media influencers posting more on Instagram than on Snapchat each day. Snap saw more influencer posts in the beauty and traditional celebrity categories, while Instagram was more popular amongst comedy and lifestyle influencers.



Analytics firm Jumpshot found that the launch of Instagram Stories did not noticeably impact the share of email signups between Instagram and Snapchat at first, with Snapchat holding steady at around 76 percent. But as Instagram Stories gained steam by the end of 2016, Snapchat’s percentage shrank to 64 percent.





Media startup The Relish found Instagram Stories added to its overall impressions, reach goals and engagement. Meanwhile, it never saw major growth or engagement on Snapchat Stories, so the launch of Instagram’s version made it “a no-brainer to hold our efforts [on Snapchat] until we have more staff.”

Mobile video platform dubdub found that Instagram Stories generated an average of 35 percent more views for brands than Snapchat Stories. However, Snapchat had a deeper influence on millennials, and its sponsored lenses selfie filters “can generate millions of gamified interactions within 24h that can help shift brand awareness and purchase intent.”

eMarketer estimates that Snapchat’s revenue growth will decline significantly in 2017 and 2018. It grew 492 percent from 2015 to 2016 when it hit $340 million in ad revenue. Revenue is projected to hit $895.5 million in 2017 as the rate drops to 163.3 percent, and $1.7 billion in 2018 with the growth rate falling to 90 percent. Still, 90 percent is a solid growth rate, and the decline is to be expected as Snapchat’s business matures. eMarketer did find that Snapchat has a massive 83.4 percent penetration rate amongst 12 to 17-year-olds in the U.S.

This data suggests that Instagram has made a dent in Snapchat, slowing its growth and making it a second choice behind Instagram for some brands. But surveys of Snapchat loyalists show a strong preference for the cool startup over the Facebook acquisition.

Snapchat survivesMobile story game maker Episode surveyed 10,000 of its users who are mostly women age 13 to 25, and found that 69 percent say their Snapchat usage hasn’t declined at all since the launch of Instagram Stories, while 22 percent say their usage has declined slightly and only 9 percent say it’s significantly declined.

Analytics provider App Annie found that Snapchat hosts an exclusive audience that often can’t be reached by advertising on other platforms, as previously reported by Bloomberg. On any given day in the U.S., 35 percent of daily Snapchat users can’t be reached on Facebook, 46 percent can’t be reached on Instagram and 58 percent can’t be reached on Messenger.



Brand ambassador network Heartbeat surveyed 1,700 13 to 20-year-olds out of its 103,000 users; 74 percent said they still post more on Snapchat, 60 percent said they post to their Snapchat Story every day compared to just 18 percent on Instagram. However, they say they average 2.5X more views on Instagram Stories than Snapchat. Asked which of the two apps they’d take if they could only have one, 51 percent said Snapchat while 49 percent said Instagram. Seventy-seven percent said ads were more relevant on Instagram, but only 19 percent thought their Snapchat Stories views have declined since the launch of Instagram.

Heartbeat’s founder Kate Edwards tells me “we have seen a significant decrease in the number of brands inquiring about Snapchat campaigns, and while we do run Snapchat campaigns for some brands, we almost always recommend that they do Instagram and Instagram Stories campaigns instead, simply because the tracking is much more robust.” She concludes that “Honestly, we think Snapchat is losing out on a number of potential revenue opportunities out there, if we’re any example, simply because they don’t understand the value of data to brands and the businesses who are advising them on how they allocate their media spends.”

Consumer insights platform Whatsgoodly surveyed 1,991 millennials in April and 1,106 in November. It found that Snapchat was overwhelmingly preferred over Instagram Stories, but the percentage that picked it fell from 88 percent in November to 78 percent in April.



Mobile ad company Kiip surveyed 10,000 users; 37 percent said their use of Snapchat declined since the launch of Instagram Stories, and 59.6 percent said they preferred Instagram Stories over Snapchat Stories. However, when asked which feature of Stories they find most important, Snapchat’s animated selfie filters were most popular, with 38.2 percent, followed by Instagram’s Live broadcasting feature with 31 percent.

They surveys indicate that millennials and Generation Z millennials may still be staying loyal to Snapchat. They might have a larger network on Instagram, and they might already be using Instagram’s permanent feed. But these early adopters of Snapchat developed an ingrained behavior of opening and posting to it daily.

As Snap Inc reports its first earnings results after going public, expect it to highlight metrics that show off this loyalty, like minutes spent per day, video views, revenue per user, and percentage of users who post to Stories — anything other than DAU that might look weaker.

While people new to the Stories format might find Instagram more convenient, Instagram hasn’t created a compelling enough reason for die-hard Snapchatters to switch.

techcrunch.com

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From: Glenn Petersen5/10/2017 3:10:59 PM
   of 41
 
An earnings preview:

Snap's first earnings to shed light on battle with Facebook, Twitter

Reuters
Wed May 10, 2017 | 12:29pm EDT




FILE PHOTO: The logo of messaging app Snapchat is seen at a booth at TechFair LA, a technology job fair, in Los Angeles, California, U.S., January 26, 2017. REUTERS/Lucy Nicholson
__________________________

NEW YORK Snap Inc ( SNAP.N) has many similarities with archrivals Facebook Inc ( FB.O) and Twitter Inc ( TWTR.N), but shareholders are eager to avoid one in particular when the social media company reports earnings on Wednesday for the first time since its initial public offering: a plunging stock price.

Investors delivered a stern message of disappointment to Facebook and Twitter when they posted debut quarterly scorecards following their IPOs. Twitter shares cratered 24 percent the following day, while Facebook's tumbled 11 percent, drops that stand to this day as the biggest one-day losses for both.

While Facebook's shares recovered from the drubbing within two quarters and trade at nearly four times their $38 IPO price, Twitter’s shares never completely regained lost ground and currently trade down nearly a third from their $26 IPO price.

The options market is already positioned for a double-digit swing in Snap shares by the end of this week.

One key to Snap, the owner of the wildly popular Snapchat messaging app, dodging a similar reception from the market rests on whether its user growth and engagement measures meet investors' expectations as Facebook aggressively copies its most successful features.

The earnings report and subsequent conference call after the bell "will be make it or break it" for Snap, said Eric Kim, co-founder and managing partner at Goodwater Capital.

The stock, which started trading in March in the largest tech IPO since Facebook's in 2012, jumped 44 percent on its debut, but has since fallen 5.5 percent from that day's closing price. On Wednesday, the shares were down 1.11 percent to $23.06.

FOCUS ON USER GROWTH

Wall Street expects Snap to post a quarterly loss of 19 cents per share, according to Thomson Reuters I/B/E/S. Analysts expect revenue of close to $158 million, roughly four times the $38.8 million figure from a year earlier, but down about 5 percent from $165.7 million for the fourth quarter of last year.

But investors will focus on Snapchat's user numbers and how the service is holding up against encroachments by rivals.

In recent months, Facebook has launched Facebook Stories, a near-identical clone of Snapchat's most popular feature, also called Stories. The feature lets users post a string of videos and photos that disappear after 24 hours and is also available on other Facebook services, including Instagram and WhatsApp.

"Much of the call should be around Stories as it represents the bulk of Snap's future value given the importance of video advertising to the company's relatively nascent business model," Goodwater's Kim said.

Facebook recently announced that Instagram Stories alone had reached 200 million daily active users (DAU), eclipsing Snapchat's year-end overall DAU count of around 161 million.

JPMorgan expects Snap's first-quarter DAU to grow to 169 million, while Monness, Crespi, Hardt & Co Inc is targeting 173 million.

Snap still may have an edge over Facebook with its active user base aged between 18 and 34, many of whom visit more than 18 times a day and are a highly coveted group for advertisers.

"Our favorable outlook on Snap stems not only from the company's ability to innovate and cater to millennials in high value markets, but also capture publisher content and consumer mindshare as video consumption grows on digital," said James Cakmak, an analyst at Monness, Crespi.





A POPULAR SHORT

Despite a modest rally in Snap shares in recent weeks, short sellers - who aim to make a profit by selling borrowed shares and buying them back at a lower price later - have not let up in placing bearish bets, according to Ihor Dusaniwsky, head of research at financial analytics firm S3 Partners.

"We saw $100 million worth of short selling in this past week, ahead of the earnings and Snap short interest stands at $946 million, which is the highest level since the IPO," he said.

Meanwhile, options market activity suggests a swing of about 13.5 percent in either direction by Friday, based on the price of certain options expiring this week.

"Snap's option activity was bullish last week, but the bears came out in greater force just two days before earnings," said David Russell, senior manager at online broker E*Trade in Chicago.

(Additional Reporting by Noel Randewich in San Francisco; Editing by Dan Burns and Bill Rigby)

reuters.com

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From: Glenn Petersen5/10/2017 5:21:31 PM
   of 41
 
Snap shares are getting hammered in AH trading.

Snap stock is tanking after its first-ever earnings report missed expectations

Snap finished March with 166 million daily active users.

by Kurt Wagner and Rani Molla
Re/code
May 10, 2017, 4:43pm EDT



Drew Angerer / Getty
_________________

Snap reported earnings for the first time today, and Wall Street isn’t happy. Shares are down more than 20 percent in after-hours trading.

The company, which makes the popular messaging app Snapchat, reported first-quarter revenue of $149.6 million. That’s up significantly from the $39 million Snap brought in during the same quarter last year, though it’s lower than Wall Street was expecting; analysts were hoping the company would generate $158 million this past quarter, nearly quadruple its Q1 revenue from a year ago.

Snap also reported a net loss of more than $2.2 billion for the quarter, $2 billion of which it attributed to “stock-based compensation ... related to RSUs with a performance condition” tied to its recent IPO.

Snapchat’s user base did grow by eight million in the first three months of 2017, and the company now has 166 million daily users. One analyst, RBC Capital’s Mark Mahaney, pegged Snapchat’s projected user base at 165 million. (Instagram, for comparison, has 400 million DAU.

Snapchat’s user growth was one of the key metrics for the company. That growth slowed in the back half of 2016, thanks in part to increased competition from Facebook, which has seemingly made it a top priority to squash Snapchat into oblivion by copying its best features.



There was concern that Facebook was indeed stunting Snapchat’s growth. The company is not growing at the rate it was in the first half of 2016, but it did add more users in Q1 than it did in Q4.

There’s also a cost item that’s eye-popping: $1.9 billion in stock-based compensation, which the filing explains as “the recognition of expense related to RSUs with a performance condition satisfied on the effectiveness of the registration statement for our initial public offering.”

We’ve asked about the expense, but it’s likely related to the bonus stock CEO Evan Spiegel was granted as an incentive for taking the company public. But even that wouldn’t fully account for the high sum. Update: On the earnings call, the company confirmed the expense was primarily related to Spiegel’s bonus, which it vested earlier than originally planned.

Snap’s earnings release was very simple, with just a few bullet points. The company will hold a call with analysts and investors at 4:30 pm ET to provide some more context, and we’ll be listening in and liveblogging the event — click here.

recode.net

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To: Glenn Petersen who wrote (27)5/13/2017 1:26:46 PM
From: Intelim
   of 41
 
This was a matter of time. Snap can might become Twitter than Twitter itself did.

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