Snapchat Could Be Valued at $19 Billion…

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Snapchat is more than just disappearing photos now…

The app recently added editorial content, a feature called Snapchat Discover. They also introduced a mobile payment system and were recently considering a serious entry into the music space.

Are all these new features worth $19 billion?

Bloomberg reports that Snapchat is seeking up to $500 million in funding. The company is being valued at $16 billion – $19 billion.

In November 2013, Snapchat turned down a $3 billion acquisition offer from Facebook. Then Facebook acquired Whatsapp for over $19 billion last year.

Bloomberg says venture capital funding is the highest it’s been in a decade.

 

Original image by Tax Credits, licensed under Creative Commons Attribution 2.0 Generic (CC by 2.0).

13 Responses

  1. Willis

    Ridiculous. This is complete overvaluation when you compare to the worth of offline companies who have tangible assets, and a customer base that is loyal (we’ve seen social networks and the roller coaster fickleness of users).

    Activison-Blizzard – $13.9B
    Alcoa AA +0.76% – $12.2B
    American Airlines – $12.3B
    Akamai – $10.9B
    AmerisourceBergen ABC -0.19% – $15.9
    Blackstone Group – $17.8B
    Campbell Soup CPB +0.72% – $13.6
    Chesapeake Energy CHK -1.88% – $17.2B
    Chipotle – $17.1B
    Citrix Systems – $10.7B
    Coach – $13.5B
    Consolidated Edison (ConEd) – $16.2B
    Discovery Communicatons – $19.1B
    Dr. Pepper Snapple Group – $10.2B
    Expedia -$10.2B
    The Gap – $19B
    Fidelity – $15.8B
    Harley-Davidson – $14.1B
    Hertz – $11.5B
    Icahn Enterprises -$13.1B
    The J.M. Smucker Company – $10B
    Kohl’s – $11.1B
    Kroger – $19.4
    Loews – $17B
    Macy’s – $19.6B
    Marriott International – $15.4B
    Mattel – $12B
    MGM Resorts – $12.7
    Monster Beverage – $12B
    Moody’s – $17.08B
    News Corp – $10.27B
    Nielsen – $17.6B
    Nordstrom – $11.4B
    Progressive – $14.3B
    Ralph Lauren – $14.2B
    Red Hat – $11.1B
    Royal Caribbean Cruises – $11.4B
    Ryanair – $15.5B
    Sherwin-Williams – $19.4B
    Southwest Airlines – $14.7B
    Starwood Hotels & Resorts – $14.9B
    Symantec – $14.4B
    TD Ameritrade – $184B
    The Carlyle Group – $11.1B
    Tiffany & Co. – $11.4B
    Tyson Foods – $13.1B
    Under Armour – $11.4B
    Whole Foods Market – $19.3B
    Workday – $17B
    Xerox – $13.2B

    Reply
    • Sarah

      Oh, these tech companies are WAY overvalued. It’s not just a matter of tangible assets and loyal customers – many tech companies aren’t even profitable and have very weak chances of ever being profitable enough to recoup all of the money invested.

      The reality is, unfortunately, that this happens because tech companies don’t need to ever be profitable – that really isn’t the point. They’re driven by VCs who care about getting a good ROI, not building a sustainable company. So unprofitable companies get funded for growth, without regard to the actual viability of the business model, and then the VCs cash out at IPO – leaving the founders and VCs very well off for having generated NO profits, funded by the public who buy the stock because it’s so hyped up. See Twitter, which is still posting massive losses.

      In order to be a good investment overall (in order for the company to have a positive value), the company needs to get to a point where it can not only cover its current costs but also have enough left over to start recouping the billions invested. When your only source of revenue is advertising, that’s a really tough play. Just my opinion, of course; we’ll have to wait and see how it plays out.

      Reply
      • jw

        If someone’s buying Snapchat stock based on the hype & the whole thing fizzles out, at what point is the investor responsible for where he or she is putting his or her own money? Don’t we have the dot com bubble to use as a warning? Fool me once, shame on me…

        Current investors are valuing the company based on what they believe they can make, & depending on the IPO price, they may be right, even if the true asset being valued here is the gullibility of stock market investors. That’s just how things work. If stock investors quit buying these stocks, the valuations would drop. It’s wrong to think that these current investors are doing due diligence on behalf of the stock investor… these guys are ultimately salesmen trying to make the most commission possible.

        There are a lot of issues with the stock market, & a lot of ways that Main Street is getting screwed by sophisticated computer systems & market manipulation & inside information & all sorts of stuff, but it’s hard for me to find pity for someone who just makes a bad investment based on hype.

        That said, I also think that a lot of these companies have less obvious value than tangible assets. For instance, a company like Instagram might be invaluable to Facebook, but worthless as a standalone company to the average investor. It’s not always as straight forward as comparing it to Harley-Davidson.

        Reply
  2. Anonymous

    Get into tech and coding and do music for yourself On the side as a hobby, wow…

    its incredibvle how valuae data and Information on users is…

    Reply
  3. invisible mandelbrot

    They also added a new feature today which allows you to record music from your phone (playing it over the speaker) while recording video…clearly a sync license, but hey…who needs licenses when everything vanishes off Snapchat in 24 hours or less…oh yeah…and you can’t see any of it anyway because the whole platform is walled.

    Also….you can go into the iTunes store, start playing a preview, go back to Snapchat, and record your new UGC music video clip and never have to have a paid subscription to anything or even buy a song.

    I’ve been warning people of this for almost two years now and it has finally arrived.

    Reply
    • Nina Ulloa

      because 10 second videos are going to replace listening to full songs?

      having audio playback stop every time you use snapchat was annoying

      Reply
      • invisible mandelbrot

        “because 10 second videos are going to replace listening to full songs?”

        Are you serious? That’s a ridiculous reply. It has nothing to do with listening to songs, it is the creation of a new work of UGC that’s based on infringing material. It is one more case of copyright infringement with zero remuneration for the rights owner, creator, etc. This further exacerbates the whole UGC issue by creating a loophole by which no one has to pay to use something you create…and the length has nothing to do with it. Infringement is infringement, regardless of how many seconds it is.

        I’m sorry you find it so annoying. Seriously…you write on a music blog? You do realize that this usage constitutes a sync license? It also likely violates the terms of use for any music service you use to pull this off as well, and perhaps is a lawsuit on the horizon for Snapchat.

        This is a music blog right?

        Reply
        • Nina Ulloa

          “.you can go into the iTunes store, start playing a preview, go back to Snapchat, and record your new UGC music video clip and never have to have a paid subscription to anything or even buy a song.”

          you were the one who said it was going to replace buying music.

          Reply
          • invisible mandelbrot

            “you were the one who said it was going to replace buying music.”

            Actually no.

            Either:
            a) you are being deliberately obtuse
            b) you don’t actually understand licensing or copyright
            c) you are trolling your own readers
            d) reading comprehension is difficult for you
            e) all or several of the above

            In any of these cases it is clear you shouldn’t be writing for a music blog because you either can’t report in depth or cannot connect the dots.

            It is unfortunate that you find it inconvenient to have music cut out while recording video, but my point as is clear is not that you are replacing listening to music via Snapchat and 10 second clips (or in general buying music to listen to it), but you can in fact play a preview of a song you never have to buy and create a work of UGC, which requires a sync license. The fact you can just grab any track in the iTunes store to create your UGC video without having to purchase the track…not only constitutes copyright infringement but also a violation of the iTunes store terms and conditions, and is in essence is a violation of someones copyright…a person who does not get paid for your using their music. In fact even if you grab 10 seconds of music from any streaming source, a royalty is likely avoided as well.

            So to summarize…I didn’t say it replaced buying music (as I mentioned streaming as well), but in fact clearly stated the requirement of a sync, licenses, etc.

          • jw

            You’re technically correct. But how would you value a background sync in a 20 second clip seen by 30 people over 24 hours?

            I’m just wondering where you the mark of diminishing returns making it just not worth it for either party.

        • Anonymous

          “This is a music blog right?”

          Nina’s trying to turn it into a new Torrentreak…

          Reply

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