Wednesday, November 16, 2016

How SnapChat could justify a $25 Billion Valuation

The valuations page will be getting an update soon, but I've often based my view on 10% of worldwide annual smartphone sales. (1.4 Billion sold last year.) I need to up that somehow for near-eye displays and 3D scanning. (The outlook keeps getting better.)

10% of the 1.4Billion smartphones is 140 Million -- more than the 60 million daily users of SnapChat.

If we do a straight market-cap comparison of MVIS to something that has sold tangibly in the recent past, like Oculus Rift -- Microvision, in my opinion has a far superior product, more useful to more people in wider markets -- that sold for 2 billion in cash... could we see market cap valuations like $25 Billion? [ Different chapter of the same story? ] I think absolutely we can, which is why I am holding tight to my position.

Yahoo News

It’s official: Snap Inc., the parent company of Snapchat, is going public in an IPO that could value the company anywhere between $20 billion and $25 billion.
To be sure, it’s a landmark moment for the photo-messaging app, which cofounders Evan Spiegel, Bobby Murphy and Reggie Brown launched just over five years ago and now attracts over 60 million daily active users. But is Snap Inc. really worth as much as $25 billion?
One need look no further the top line of Snap Inc., whose main product involves sending self-erasing photos to your friends. Earlier this year, leaked documents revealed the startup expects to generate between $500 million and $1 billion in revenues in 2017, a healthy figure backed by third-party digital research firm eMarketer. Indeed, eMarketer expects Snap Inc. to make $935.5 million next year, up from $366.7 million in ad sales in 2016.
“The revenues are really good quality revenues,” explains Li, who views a 20 to 1 ratio of valuation to revenues as solid. “These are brand marketers who are saying, ‘Hey, they are shifting brand dollars — real brand dollars on other parts of the budget — to Snapchat.’ More than anything else, because people are engaging with them, it is also a way to tap into something that is completely private as opposed to Facebook or Twitter.”

No comments:

Post a Comment