#nofilter

All you need to know about Snapchat

February 28 by Leonardo Siligato

Company: Based in Los Angeles, Snap Inc. is the parent of Snapchat, that disappearing-message app where hours of your time can also disappear in a flash…

Leadership: Baby-faced co-founders Evan Spiegel and Bobby Murphy are at the helm as CEO and CTO, respectively. Spiegel is the public face of the company while Murphy leads the product and engineering teams, including a secret lab where they work on stuff like Google Glass – I mean, Spectacles. They each have a 22.4% stake in the company.

Main Moneymaker(s): Snapchat, a photo-messaging app. Its novelty (which has been copied by others) lies in the fact that pictures and messages can be viewed only within a short period of time before they go *poof*. While this initially seemed to cynics like yet another tool for teens to share dick pics, its popularity exploded mainly thanks to its original, quirky filters.

Its Snaps and Stories feature helped to quickly build up a massively engaged and addicted audience of mostly millennials. Brands have taken notice, forking out for ads and sponsored content like customised “lenses,” animated filters that turn selfies into goofy taco heads and the like.

Competition: Your usual social media suspects, particularly Facebook which has been shamelessly ripping off Snapchat features. (Case in point: Instagram Stories.) In addition, Snap also sees Apple and Google as major threats to its business. Why? Both tech juggernauts can exploit their dominance of smartphone operating systems and major app stores to launch Snapchat-like products.

Revenue: $404.5 million in 2016

Red Flags: Bloomberg pointed out that for every dollar Snap made in the fourth quarter of 2016, it racked up 93 cents in costs. Alright, so innovation doesn’t come cheap and it’s normal for tech companies to burn through cash at this stage.

But cynics on Wall Street are asking if post-IPO Snap is going to be like Facebook or Twitter. In other words, will profitability be just around the corner? Or is it going to be one big, uphill journey with a catastrophic landslide every now and then? Plus, Snapchat’s most engaged users are aged 18-24, a notoriously fickle bunch, so could its popularity end up being as fleeting as a user’s post?

Future Bets: A look at 2016 throws up some clues that point to Snap’s future growth prospects: It recently ventured into hardware with Spectacles, sunglasses with a built-in camera that lets you discreetly take photos and videos like a true creep; and it spent over $100 million to buy over the Bitmoji app and an augmented reality startup.

Whether it introduces new hardware or software, Snap is undoubtedly going to be serving up more creative solutions for content creation in the future. Getting more users to waste even more time on the platform means Snap can monetise the hell out of them and lure over more ad dollars.

Fun Fact: Co-founders Spiegel and Murphy met in Stanford University where they started Snapchat as a class project. It was originally called “Picaboo.” (Its ghost logo makes so much sense now!)

 

You can trade Snapchat on BUX!

 

Written by

Leonardo Siligato

Holds a degree in Economics and Finance from Bocconi University, where he also worked as a research assistant for a while. After several years at Italian national all-news radio station Radio 24, he now delivers financial news and articles at BUX. A mountain enthusiast, he could not have chosen a better place to pursue his passion than the Netherlands… Look him up on BUX: @Siligon_Valley

Disclaimer: All views, opinions or analysis expressed in articles are that of the author and do not represent the views of BUX. Neither BUX nor the author provide financial advice and these articles should not be construed as such.

All posts
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.7% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.