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From: Glenn Petersen6/9/2017 1:21:46 AM
1 Recommendation   of 45
 
Snap Is Year's Most-Shorted Tech IPO Before Lockup Ends


by Alex Barinka and Sarah Frier
Bloomberg
June 8, 2017

-- Short interest in Snapchat parent rises to 28% of free float

-- Facebook faced half as much shorting at same point after IPO

Snap Inc. is the most-shorted tech initial public offering of the year, with a growing number of traders betting the stock will fall.

Investors are skeptical that the company, which owns the Snapchat photo-sharing app, can grow quickly enough to justify its valuation -- now at about $22 billion -- given aggressive competition from Facebook Inc., which has been copying some of Snapchat’s features. That’s helped drive short interest in Snap up to 28 percent of the free float, or shares available to be traded publicly, according to data from Markit Group Ltd. The increase comes before the first lockup expiration on the shares -- on July 30 -- when certain stakeholders and executives will be free to unload their positions for the first time since the March 1 IPO.

The stock fell 3.6 percent to $18.85 at Thursday’s close in New York. Earlier, the shares dropped as much as 7.1 percent for the biggest intraday decline since May 11, the day after Snap’s earnings report showed the company missed user growth and sales estimates. The shares sold for $17 apiece when the company went public in March.

“It looks like short sellers are positioning themselves for a dramatic selloff in Snap’s stock price after the lockups expire,” Anthony DiClemente, an analyst at Nomura Instinet, wrote in a research note on Wednesday.

An investor successfully shorts a stock by borrowing a number of shares from a broker, paying the broker a stock-loan fee and interest for the loan, and then selling the shares at the current share price. If the stock price declines, the investor then buys the same amount of stock at the lower price, returns the shares to the broker and pockets the difference.

DiClemente noted that there are more than $1 billion in Snap shares sold short, and with so few shares left to borrow, the cost to finance short positions has risen to 37 percent, compared with a 1 percent fee in May. The harder it is for brokers to get their hands on shares available to be lent out, the more the stock-loan fee typically increases.

Though the shares were up about 11 percent since the IPO at Thursday’s close, the percentage of Snapchat sold short as of Wednesday was about double Facebook’s short interest at the same point -- 68 completed trading days -- after it debuted as a public company. At the time, Facebook was facing serious doubts about its ability to make money from mobile advertising, causing the stock to lose half its value in the first six months of trading.

Facebook has since recovered as it mastered mobile ads, and as revenue has surged its stock has more than quadrupled since the IPO. Twitter Inc., which went public in 2013, had short interest of 40 percent at the same number of days after its IPO, and its shares remain about 32 percent below their initial price.

Snap’s stock has the highest short interest of the 14 technology and communications companies that have listed in the U.S. this year. It’s trailed by Carvana Co., at 22 percent of its free float, and Yext Inc. at 19 percent, according to Markit.

While investors can use short interest and options trading as a hedge to mitigate risk on long positions, Snap’s trading is overwhelmingly bearish. The top nine most-owned options are all puts -- or contracts that can be exercised if the stock falls below the exercise price.

The January 2018 $15 put options, with an exercise price 23 percent below Wednesday’s $19.56 close, had the highest open interest, which is the number of contracts outstanding, according to data compiled by Bloomberg.



bloomberg.com

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From: Sr K6/17/2017 8:54:59 AM
   of 45
 
on the Russell rebalance following the close June 23:


Tech to see bump in growth weighting in Russell rejig

BY CHUCK MIKOLAJCZAK, REUTERS - 9:17 PM ET 6/16/2017

.
.

One widely-followed stock that will not be joining a Russell index yet is Snap Inc. Due to the company's unusual share structure, Russell is withholding a decision until after the rebalance until an analysis and comment period from the investment community is completed.

"We need to look at it because there is a potentially a trend for these types of offerings, particularly technology companies," said Mat Lystra, senior research analyst at FTSE Russell in Seattle.

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From: Glenn Petersen7/10/2017 4:25:59 PM
   of 45
 
Snap closes below $17 IPO price amid fears insiders will dump shares

  • The IPO was 12 times oversubscribed, sources told CNBC in March.
  • But shares have tumbled from their March 3 high.
  • At the end of the month, insiders can begin selling their shares.
Anita Balakrishnan | @MsABalakrishnan
10 Mins Ago
CNBC.com



Lucas Jackson | Reuters
Snap cofounders Evan Spiegel (R) and Bobby Murphy walk to ring the opening bell of the New York Stock Exchange shortly before the company's IPO in New York, March 2, 2017.
____________________________

Shares of Snap fell below their IPO price on Monday, just ahead of a crucial period for the social media stock.

Snap shares dipped to a low of $16.95, closing at $16.99, just below the $17 price of the March public offering.

The IPO was 12 times oversubscribed at the time, sources told CNBC. But since then, shares have tumbled from their March 3 high of $29.44.



Snap, which makes ephemeral messaging app Snapchat, is about to see the end of its lock-up period. When that period hits at the end of the month, insiders can begin selling their shares.

Facebook, Twitter and LinkedIn fell an average of 24 percent in the 30 days ahead of their lockup expirations, according to MKM Partners. Snap shares have fallen nearly 19 percent in the past three months, and about 6 percent over the past month.

— CNBC's Evelyn Cheng contributed to this report.

http://www.cnbc.com/2017/07/10/snapchat-snap-falls-below-17-ipo-price-for-the-first-time.html



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From: Glenn Petersen7/15/2017 9:18:46 AM
1 Recommendation   of 45
 
Snap had acquisition talks with AdRoll and is actively shopping for ad tech startups

Alexei Oreskovic and Alex Heath
Business Insider
July 14, 2017



Snap Chief Strategy Officer Imran Khan is responsible for growing the company's fledgling ad business.Reuters
_________________________________

Snapchat is shopping for ad tech companies to help bolster its appeal to marketers, a process that led the company to have acquisition talks with AdRoll, Business Insider has learned.

Snapchat's main targets are startups in the marketing tech and ad tech sectors, as the social network owned by parent company Snap Inc. seeks to grow its ad business and allay investor concerns that have punished its stock price.

"They're looking for some business, or a set of businesses, that can help them demonstrate the efficacy of their ads," a person familiar with the matter told BI. Snap acquired Placed for reportedly over $200 million in June to give it access to third-party measurement on tracking real-world purchases and store visits.

Discussions with San Francisco-based AdRoll began shortly before Snap's March IPO and continued after. Although there were multiple meetings between the two companies, an offer price was never put on the table and AdRoll is currently in more serious discussions with several other bidders, the person said.

A Snap spokesperson declined to comment for this story. AdRoll didn't respond to multiple requests for comment on Friday.

AdRoll has raised roughly $91 million in venture capital funding to date and claims to be the most widely-used independent programmatic advertising platform, with more than 35,000 customers. The company is borderline profitable and on pace to do over $300 million in revenue this year, another person familiar with its business said.

Feeling the pressureBuying AdRoll would give Snap a deeper foothold in ad targeting and campaign management along with e-commerce expertise, a third ad industry insider told BI.

"Snapchat buying AdRoll would be somewhat analogous to Google buying DoubleClick," the person said, referencing Google's blockbuster $3.1 billion purchase from 2007 that signaled its push into online advertising beyond its own scope.

Although incredibly popular with younger users, Snap is under pressure to convince advertisers that its ads can deliver, especially compared to proven rivals like Facebook and Google.

Snap's stock sank below its $17 initial public offering price this week, as a series of Wall Street analysts downgraded the stock due to Snap's slower-than-expected growth and fierce competition from Facebook-owned Instagram.

"We have been wrong about Snap's ability to innovate and improve its ad product this year (improving scalability, targeting, measurability, etc.) and user monetization as it works to move beyond 'experimental' ad budgets into larger branded and direct response ad allocations," Morgan Stanley analyst Brian Nowak wrote in a note to clients earlier this week.

Although Snap's talks with AdRoll have not gotten serious enough to progress to an offer, Snap is actively looking at other firms in the broad and increasingly overlapping field of advertising and marketing technology. Another name that has been bandied about as being on Snap's radar is Segment, a customer data tracking tool for marketers, although it could not be learned if the two companies have had deal talks.





businessinsider.com

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From: da_cheif™8/1/2017 3:26:11 PM
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Message 31011253

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From: Glenn Petersen8/3/2017 10:16:01 PM
   of 45
 
Insiders say Google was interested in buying Snap for at least $30 billion last year

Alex Heath
Business Insider
August v3, 2017



Snap CEO Evan Spiegel. Reuters
___________________________

We keep hearing that Google floated an offer of at least $30 billion to buy Snap in early 2016.

Three people, including people inside and close to the company, separately confirmed they had heard the chatter and price tag, with one calling it an "open secret" among Snap's upper ranks and certain tech industry circles.

Business Insider first heard the rumor of Google's $30 billion-plus interest in Snap last year and heard further tales of the discussions from more insiders over the past several days.

It's unclear how formal the discussions these insiders say happened may have been, but Snap and Google have long been close. Informal discussions between companies are frequent in the tech world, especially surrounding major events, like an initial public offering or a large round of fundraising.

Google's initial offer would have been discussed just before Snap raised its Series F round of private funding in May 2016, valuing the company at $20 billion. CapitalG, the growth equity fund managed by Google's parent company, Alphabet, ended up quietly participating in the round.

One person said Google and Snap also had discussions about a potential buyout just ahead of Snap's IPO in March, and that an offer in the ballpark of $30 billion had been on the table since the IPO.

Chatter that Snap passed up a chance to sell to Google for at least twice its current value could be especially painful for investors and employees grappling with the company's sinking stock. Snap's shares are trading at around $12.50, and it has a market cap of roughly $14 billion, well below the $24 billion valuation at which it priced its IPO.

When asked for comment, a Snap representative told Business Insider that as far as formal discussions go, "these rumors are false." Google declined to comment.

One possible motivation behind the rumors is that people are hoping Snap will get acquired. But the rumors have persisted for months, and they're being talked about as fact both inside and outside the company by lots of people in a position to know.

Why a deal between Snap and Google would make sense



Alphabet Executive Chairman Eric Schmidt. REUTERS/Rebecca Naden
_______________________________

The two companies are already close. Sources say there is mutual respect between each side's leadership, and Alphabet's executive chairman, Eric Schmidt, is an early adviser to Snap CEO Evan Spiegel. Snap is one of the largest customers of Google Cloud and uses Google's suite of apps internally.

Google has always wanted to own a hot social network and has tried several times with products like Google Plus and Google Buzz. In 2013, it was rumored that Google had tried to grab Snapchat for $4 billion as Spiegel turned down an offer from Facebook CEO Mark Zuckerberg.

Joining forces with Google could also help Snap better monetize its platform — Google is raking in the vast majority of all digital ad money — and it could be a good way for Spiegel to stick it to Zuckerberg, with whom he has had a rocky relationship.

And here's why a deal may not work

27-year-old Spiegel would ultimately decide whether to sell Snap, and people close to the company say he's fiercely independent and has shown no serious interest in selling. He is widely considered to be a visionary, contrarian CEO who values running his company in Southern California, outside of the Silicon Valley bubble where Alphabet is headquartered.

It's also unclear how Spiegel and his roughly 2,500 employees would integrate into Google or Alphabet. Spiegel doesn't strike us as the kind of executive who would like reporting to a boss.

businessinsider.com

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From: Sr K8/4/2017 10:37:32 PM
   of 45
 
on WSJ.com

Google is developing technology to let publishers create visual-oriented media content along the lines of Snapchat’s “Discover,” upping the ante in a race among tech giants to dominate news dissemination on smartphones.

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From: Glenn Petersen10/4/2017 5:32:28 AM
1 Recommendation   of 45
 
Snap has sold more Spectacles than Apple sold iPods in their first year, says CEO, but investors still 'fearful'
  • Snap CEO Spiegel spoke to author Walter Isaacson at Vanity Fair's fourth annual New Establishment Summit in Beverly Hills, California.
  • Spiegel's comments on Tuesday indicated that Spectacles unit sales are now higher than the iPod's after a year — a figure he's proud of, given that Apple's iPod had about 143,000 net unit sales in its first full year, 2002.
  • "I think investors are fearful, and fear is a powerful motivator -- they're fearful we'll never be profitable, or they're fearful that competition will kill us or something like that," Spiegel said. "But I think those are kind of normal fears for any start-up."
Anita Balakrishnan | @MsABalakrishnan
CNBC.com
October 3, 2017



Getty Images
Evan Spiegel, co-founder and CEO of Snapchat
_______________________________________

Snap has sold about 150,000 of its camera glasses, called Spectacles, CEO Evan Spiegel said on Tuesday.

Spiegel spoke to author Walter Isaacson at Vanity Fair's fourth annual New Establishment Summit in Beverly Hills, California. But while Spiegel said the sales figure far exceeded internal expectations for the product, Isaacson argued it seemed like the device wasn't catching on.

Snap, which makes the ephemeral messaging app Snapchat, has rebranded itself as a "camera company." But at least as of May, it seemed like its much-hyped camera device wasn't making a mark on Snap's business, which is funded mostly by advertising on Snapchat.

In May, Snap said its $130 augmented reality and camera glasses generated a little more than $8 million in revenue during the quarter — out of total revenue of $150 million — which would have indicated sales of about 61,500 units of the Spectacles if they were sold at full price.

Spiegel's comments on Tuesday indicated that Spectacle unit sales are now higher — a figure he's proud of, given that Apple's iPod had about 143,000 net unit sales in its first full year, 2002. For Snap, the glasses are a way to build expertise in the hardware field, in anticipation of greater adoption in the next ten years — "so many things" are coming for Spectacles, he said.

But Spiegel conceded that he's had trouble selling parts of his long-term vision to investors, not just when it comes to Spectacles.

"One of the things I did underestimate was how much more important communication becomes," Spiegel said. "When you go public… you really need to explain to a huge new investor base, right – instead of having 10 new investors, you have 10,000 – you have to explain how your business works. And at the same time you need to do that, there are also all these new regulations about what you can and cannot say and how you can communicate. So I think one of the things we've been going through this year is how to communicate the Snap story."

Spiegel had an awkward exchange with Wall Street analysts in August, when a hot mic caught an analyst describing how it was difficult to understand Spiegel's answer to a question. While Snap's IPO saw big gains out of the gate, shares have fallen more than 34 percent over the past six months.

"I think investors are fearful, and fear is a powerful motivator – they're fearful we'll never be profitable, or they're fearful that competition will kill us or something like that," Spiegel said. "But I think those are kind of normal fears for any start-up – and the really successful companies just grow through that. And that's why we've just tried to stay focused on the business this year and execute and deliver results."

--Additional reporting by Leanne Miller

https://www.cnbc.com/2017/10/03/snap-spectacles-how-many-have-been-sold.html

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From: hollyhunter10/12/2017 7:44:39 PM
   of 45
 
On watch for breakout at 16.86.

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From: Glenn Petersen10/22/2017 11:00:55 AM
   of 45
 
There is perhaps no better example of this dynamic than what has happened to Snap, the company that makes the disappearing messaging app Snapchat. Although it is one of the most innovative consumer-focused internet companies — Snap created a whole new paradigm in social networking, and pioneered the idea that the camera is the future of human communication — it has been battered by the giants.

How the Frightful Five Put Start-Ups in a Lose-Lose Situation

Farhad Manjoo
New York Times
OCT. 18, 2017



Credit Doug Chayka
____________________

The tech giants are too big. But so what? Hasn’t that always been the case?

As the men who run Silicon Valley will be the first to tell you, a company’s size doesn’t matter here. For every lumbering Goliath, there are always one or two smarter, faster Davids just now starting up in some fabled garage, getting ready to slay the giants when they least expect it.

So if you’re worried about the power of the Frightful Five — Amazon, Apple, Google, Facebook and Microsoft — just look at how IBM, Hewlett-Packard or monopoly-era Microsoft fell to earth. They were all victims of “ creative destruction,” of an “ innovator’s dilemma,” the theories that bolster Silicon Valley’s vision of itself as a roiling sea of pathbreaking upstarts, where the very thing that made you big also makes you vulnerable.

Well, maybe not this time.

The technology industry is now a playground for giants. Where 10 or 20 years ago we looked to start-ups as a font of future wonders, today the energy and momentum have shifted almost completely to the big guys. In addition to the many platforms they own already, one or more of the Five are on their way to owning artificial intelligence, voice assistants, virtual and augmented reality, robotics, home automation, and every other cool and crazy thing that will rule tomorrow.

Start-ups are still getting funding and still making breakthroughs. But their victory has never been likely (fewer than 1 percent of start-ups end up as $1 billion companies), and recently their chances of breakout success — and especially of knocking the giants off their perches — have diminished considerably.

The best start-ups keep being scooped up by the big guys (see Instagram and WhatsApp, owned by Facebook). Those that escape face merciless, sometimes unfair competition (their innovations copied, their projects litigated against). And even when the start-ups succeed, the Five still win.

Because today’s giants are nimbler and more paranoid about upstart competition than the tech behemoths of yore, they have cleverly created an ecosystem that enriches themselves even when they don’t think of the best ideas first. The Five run server clouds, app stores, ad networks and venture firms, altars to which the smaller guys must pay a sizable tax just for existing. For the Five, the start-up economy has turned into a heads-I-win-tails-you-lose proposition — they love start-ups, but in the same way that orcas love baby seals.

There is perhaps no better example of this dynamic than what has happened to Snap, the company that makes the disappearing messaging app Snapchat. Although it is one of the most innovative consumer-focused internet companies — Snap created a whole new paradigm in social networking, and pioneered the idea that the camera is the future of human communication — it has been battered by the giants.

After failing to buy Snap several years ago, Facebook repeatedly tried to copy its key innovations. This year, when Facebook lifted Snapchat’s Stories feature for Instagram, WhatsApp and Facebook’s main app, it seemed to deliver a death blow.



Joey Levin, the chief executive of IAC, an internet and media company that looks for opportunities above, beneath and between the giants. Credit Audrey C. Tiernan
_________________________

Facebook isn’t the only behemoth trying to feed off Snap’s carcass. In January, Snap signed a cloud hosting deal with Google. It agreed to pay Google $400 million a year for the next five years. Note that Snap booked only about $330 million in ad revenue in the first half of this year. In other words, it’s paying more than half of its revenue to Google.

Oh, and do you know who its largest competitors in the internet ad market are? Surprise! Facebook and Google.

The small guys won’t concede any this, of course. Unbridled optimism fuels start-up world, and many investors and start-up executives I talked to in recent weeks argued that with the insane amounts of money pouring into start-ups, the Five don’t have the whole game won.

They said the Five’s platforms had made starting companies cheaper and easier, and pointed to several successful start-ups that managed to elude the Five’s clutches in the last few years: Netflix, Uber and Airbnb. And when you look at business-focused companies that aren’t household names, you come up with dozens more, from Slack to Stripe to Square.

“In a lot of ways I’d say it hasn’t changed,” said Joey Levin, the chief executive of IAC, an internet and media company based in New York. “I’ve been around the internet long enough, and the first thing we used to ask in every meeting when I started was, ‘Why won’t Microsoft do your business?’ Then six years later it was, ‘Why doesn’t Google do it?’ Now it’s a combination of why can’t Facebook, Google, Apple or Amazon do this?”

Mr. Levin’s position is interesting. Even if you may not have heard of it, IAC has been battling giants online for a long time. The company grew out of the media tycoon Barry Diller’s television holdings of the 1990s; over the last two decades, IAC created a string of digital brands that tried to find some foothold outside the fiefs of the giants. Among them are Expedia, Match.com, Tinder, Ask.com and Vimeo.

Some of these companies became the biggest brands in their categories, while others were also-rans that came up short against the day’s tech giants. In many cases, though, IAC made money by shrewdly navigating the giants. Sometimes it worked with the behemoths, other times it competed with them, and always it looked for opportunities above and beneath and between the giants, like a clever pigeon picking up crumbs around a picnic table.

IAC’s latest gambit is Angi Homeservices, a company that combines two big brands aimed at home repair and refurbishing, Angie’s List and HomeAdvisor. That company competes directly with some of the Five — both Google and Amazon have services meant to help you find people to install things your house.

Chris Terrill, the chief executive, told me that Angi Homeservices had a dedicated team working on providing a service that’s superior to anything the giants can build. But he also said his company was eager to team up with one of the big guys — for instance, on one of their voice-assistant platforms — because working with one of the Five could ease its path into the big leagues.

“We think that a smart voice provider will say, ‘If I want to win at all costs, we’ll go get the very best partner’ — and that’s us,” Mr. Terrill said.

In some ways, IAC could be a model for the internet company of tomorrow. It clearly aims big and isn’t going for second place. But it has also internalized a kind of working method that recognizes the Five as more-or-less permanent fixtures of the internet. It’s not betting on their demise; rather, it’s betting on their continued success. If Angi is to win, so will one or more of the Five.

IAC’s executives recognize the danger of a digital marketplace that is so heavily dependent on big guys. “I think the opportunities are still there, but I do worry that some of the biggest players are going to stifle that competition by trying to do and own too much themselves,” Mr. Terrill said.

I asked another IAC veteran, Dara Khosrowshahi — who until recently was the chief executive of Expedia — whether he believed the internet was still an open field for innovation, or whether the Five were closing it off.

“I’m mixed as it relates to that,” he said. “I fundamentally think innovative ideas can still survive and thrive, but the Googles and Facebooks of the world have so much more intelligence as to mass consumer behavior that they probably have an unfair advantage in identifying these early fast movers — and are willing to pay prices that are extraordinary for them.”

In August, Mr. Khosrowshahi was appointed chief executive of Uber, where he will have to deal with the giants more directly. Though his company is the most highly valued start-up of our age, its success seems far from assured. Many of its problems are of its own making, and Mr. Khosrowshahi is determined to fix them.

But like Snap, Uber is at the mercy of the Five. Alphabet, Google’s parent company, is an investor in Uber. But Alphabet’s autonomous-car company, Waymo, is also a competitor to Uber. On top of that, Waymo has sued Uber, alleging theft of trade secrets.

The future of Uber, of ride-hailing and of autonomous vehicles in America is hazy. But here’s one thing that seems a sure bet: Whether Uber wins or loses, Google will end up doing just fine.

Email: farhad.manjoo@nytimes.com; Twitter: @fmanjoo

A version of this article appears in print on October 19, 2017, on Page B1 of the New York edition with the headline: A Frightful Stranglehold On Tech Start-Ups.

nytimes.com

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