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Creative Network-Marketing Research Institute
20 Jul 2017

Snap Inc (SNAP) Stock Isn’t Going to Rebound, At Least Not Anytime Soon

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Get out of SNAP stock while it still has some kind of value to it

Wall Street is in a tizzy over the news that social media darling Snap Inc (NYSE:SNAP), commonly called “Snapchat,” has seen its shares plunge nearly 40% since the company’s March IPO. Investors are distressed that SNAP stock shares have dropped below the initial IPO price

Many stock market pundits have been comparing the difficulties the stock is having in its first several months as a public company to Facebook Inc (NASDAQ:FB), which also saw its shares sink on disappointing financial results soon after its IPO in 2012.

But that’s where the similarities end.

For investors looking for a ray of hope in Facebook’s turnaround, they should really look elsewhere.

Snap Is No Facebook

The biggest difference between the two companies?

Facebook was always profitable, even in its first year being public.

In 2012 it made $0.16 and earnings have been moving higher ever since. This year, the Zacks Consensus Estimate is calling for $4.91.

Instead of living off of false hopes of being like Facebook, Snapchat investors should really be comparing themselves to what happened at global creative online site Etsy Inc (NASDAQ:ETSY) since its 2015 IPO.

Here’s why Snapchat’s future could play out like Etsy’s.

Similar Anti-Silicon Valley Culture

Brooklyn Loyal

Etsy was founded in 2005 in Brooklyn as an online store for artists and those selling unique, homemade goods. Its headquarters remains in Brooklyn, despite many online companies being headquartered in Silicon Valley.

It’s seen the gentrification of Brooklyn into a hipster neighborhood over the last 12 years. In 2016, it moved into a new 200,000 square foot corporate headquarters complete with twice weekly locally catered meals, a breathing room with yoga classes, and artwork on the wall created by the site’s artists.

Working at the Beach

Snap was founded in 2011 and is now located in the Venice Beach neighborhood of Los Angeles, supposedly specifically to avoid being in Silicon Valley.

It doesn’t really have a headquarters, as it still occupies the small original bungalow steps from the beach and many other spaces in Venice and nearby Marina del Ray.

Snapchat has also witnessed the gentrification of Venice since it set up shop. It offers vouchers to employees to eat in local restaurants which have turned more trendy since its arrival in the neighborhood.

2. High Costs of Perks

Both Etsy and Snapchat have generous employee perks. Both have internship programs that are among the best in the country with Etsy paying $6,000 per month as well as providing travel expenses and housing.

Snapchat is known to pay up to $10,000 a month, at least for engineers, as well as $1500 a month for housing.

Brimming with cash after an IPO, no one usually cares much about the cost of perks, including free drinks, food, and internship programs.

Read More: http://investorplace.com/2017/07/snap-inc-snap-stock-isnt-going-rebound-not-anytime-soon-ggsyn/