Snapchat is going public at a valuation of 26B USD and expect to raise about 3.5B USD, what drives the valuations of such companies given they have a turnover of less than 1B USD and have never made a profit.
Even the co-founder is 26YO will breathe rarefied birrionare air when his Co goes public, do you think they can sustain that valuation and probably go higher?
Most companies that run the world have no physical asset to show their wealth . It’s all intangible assets . Look at facebook they have no much physical assets , alibaba, amazon, redit, and so on.
Most of these companies have moved from traditional way of valuation to " future potential technological evaluation"
Having said that snapchat is like water in a dam. Full of potent ,waiting for the tap to open . So yes it’s valuation is valid and stands per where it is now.
Same thing was said of Twitter when they went public, they are taking a proper thrashing now because there’s only so much goodwill you’ll get unless you are Amazon. Maybe snapchat might go the Twitter way, sustaining a 26B valuation sio jokes Fb, google are profitable
1 Like
Toa reddit hapo
But how does snapchat make money? or how will it make Money?
Facebook walijanjaruka and diversified Kitambo
Same question I have
Their future value. Their marketability. Snapchat has teens hooked in the western world. So yes right now they have low sales, but what could they be turned into. Literally anything.
If they want to make money, they can start today if they want to.
This is the age of Unicorns, in tech you don’t have to sell something to be valuable, most startups just extend their runways until they are bought, the monetization strategy will be figured out later.
Same thing was said of Twitter yet they have been unable to turn a profit, unless they divest into other areas, don’t see how they’ll manage
But they are going public, sooner or later the public will want to see the numbers, Tesla have until the Model 3, Amazon seem to get away with losses
Twitter is doing pretty well if we classify it as a medium company, the problem is it likes to think of itself as a big company like Facebook and google, hapo haiwesmake, it has hired too much unnecessary staff and offices, if it could cut down on spending it will be profitable, but the problem is once you’ve taken people’s money and gone public you can’t make such decisions easily
When still a private company, the VCs will push for growth numbers at all costs to justify high valuations and up rounds so they recoup their money and even higher valuations for IPOs because it’s the ultimate money market, but eventually the markets will bring sanity to some of these valuations if you don’t turn a profit and I don’t think snapchat will turn a decent enough profit to justify that valuation
1 Like
Amazon has survived for more than 20 years. Their marketability is huge. So is Tesla. Saw a lot of their cars on the road on my last visit. They are just waiting on economies of scale. Tesla is like apple in the 90s. Just perfecting their game. Waiting on the tide to turn Everyone knows we are are going electric in cars. It’s a matter of time. And then they will hold valuable technology on charge engineering vehicles mass production. Whomever will try to get in may have to go through them.
1 Like
Snapchat will bypass by mile. You need to understand Snapchat in the US.
Think Tesla have until their Model 3 which they say it will be the Corolla/NZE of electric vehicles, if that doesnt become a hit, dont see the public market being so accommodating to them. With Amazon, they have always told the story that they want to be the “everything store” and that the internet is still at day 1 to them, but they always seem to excite the public with their offerings, pioneers of cloud through AWS, kindle, their physical shopping stores now (
https://www.youtube.com/watch?v=NrmMk1Myrxc
) Alexa think they still have public goodwill with them
Will wait and see, though to survive they will need to come up with new offerings
Battery production in mass is a sophisticated operation. Tesla is way ahead of anyone. They don’t even need to build car engines to survive. Think of other engine systems e.g. Planes, plants,boats, etc
mtu anieleze kwa kinaga ubaga how this snapchat works. please dont tell me to google