It’s no secret I’ve been bearish about Snapchat. Snap Inc. can’t catch a break, or so it appears. Facebook and Instagram have zero qualms ripping its features. Stock pundits love to remind us “The company has a two bull momentum rating – which indicates weakness but not a full-scale breakdown.” Shareholders have filed lawsuits claiming Snap misrepresented its actual user base numbers causing a drop in the price of its shares.
Shareholder dividends, usually cash or stocks are unequivocally missing from Snap Inc.’s charter. Currently, it is offering a dividend yield of 0.00% and a 5-year dividend growth rate of 0.00%. The past year has seen its stock trade in the range of $17.59 and $29.44. Sweet deal?
Technicals | Support: 156.88 | Resistance: 163.44 | Image courtesy http://news.cmlviz.com
Citing app download data from SensorTower, a mobile app store marketing intelligence platform, marketwatch.com quoted the analysts as saying that worldwide downloads of Snapchat have declined 22 percent year-over-year in the first two months of the second quarter. “This is a worrisome trend, especially when compared with Snap competitor Facebook Inc, which saw Instagram downloads increasing year-over-year in that same time,” the analysts were quoted as saying.
Perhaps all is not grim, Medium reported that a recent study found that about half of the users who follow journalists believed that their presence on the app increased their credibility. Perhaps it’s the fact that over 70% of Snap’s user base is under 34 years old and female, and probably not beholden to traditional news outlets and their agendas? Or the fact that its self-serve tools that connect advertisers to third-party adtech tools were rolled out in February and this momentum has yet to show itself in hard dollars? It recently acquired Placed, a location analytics company.
Snapchat’s foray into digital TV, with production partners like A+E Networks, NBCUniversal and Elisabeth Murdoch’s Vertical Networks providing positive feedback to the company’s approach to original video series is perhaps a sign of things to come. The runaway success show, Second Chance, featuring former couples rehashing their past relationship is one prime example of this.
So does Spiegel does really get what Millenials want? Maybe, for a company valued in the billions of dollars with very little profit, these details matter to shareholders. But can good things happen soon enough or will Spiegel go down in history as the guy who should’ve sold out when Facebook gave him the chance?
I’m feeling bearish about this, again Spiegel.