Issue No. 195: The Once and Future King

$SNAP is trading up 10% for the day, at press time. Here is a rundown of the fuego takes:

@AnilDash: “My hot take on $SNAP: a fine company, but the pressure of living up to an astronomical valuation will cause problems as we saw for Twitter.”

@SallyShin: “Snap volume during first 10 min of trade: Total: 64M shares, Opening print: 26M, Ex-that: 38M shares changed hands”

@alex: “At $17/share, ~$24B, $SNAP investors are paying nearly $152 per DAU.”

@JonahLupton: “Just 40 months ago @Snapchat rejected a $3 billion acquisition offer from @Facebook, today $SNAP had their IPO and is now worth $30 billion.”

@marketwatch: “SNAP’s valuation has already surpassed: CBS, American Airlines, Hershey, Viacom, Best Buy, Twitter, Macy’s”

@sm: “My tweets may be biased because I’m now the proud owner of 4 shares of $SNAP. Just wanted to disclose.”


A last word: why $SNAP could work after all

Selling hardware, on the other hand, means asking Snap’s users for cash, and that’s a good thing. Differentiation strategies can work, but, as noted above in the context of Disney, they work by getting the users who benefit from that differentiation to pay.

To be sure, it is very early days for Snap and hardware, and it may not amount to anything. But, then again, you could say the same thing about Snap itself. From my perspective having the possibility of a hardware business increases the option value, and for now optionality is the primary reason to buy into this IPO in the first place.

– Ben Thompson, 

See more of the issue here.

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