Snapchat Loses $15 Billion In Value as CEO Evan Spiegel Enjoys a Blissful Yachting Vacation

Snapchat Loses $15 Billion In Value as CEO Evan Spiegel Enjoys a Blissful Yachting Vacation
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One way to sum up Snapchat CEO Evan Spiegel’s attitude: ‘What, me worry?’

Building a business model around filters with dog noses doesn’t turn a profit.  Just ask Snapchat.  Two months ago, Snapchat’s parent company posted a dismal Q1 report.  Thanks to a rapid deceleration of users, Snap posted $2.2 billion in losses.

Now, while Snapchat faces yet another financial crisis, CEO Evan Spiegel has taken a multi-week, ‘off-the-grid’ seafaring vacation.

Following their dismal Q1 2017 report in May, investors fled the company, causing it to lose $6 billion overnight.  Snapchat simply hasn’t built a plan to defend itself against social networking behemoth, Facebook.  And Spielgel & Co still don’t have a plan to attract users away from Instagram Stories, an outright clone its own Snapchat Stories.

Criticizing Spiegel’s inability to innovate, Morgan Stanley analysts knocked its stock target price to $16.  It downgraded the stock just four months after its debut.  The stock opened at $24.48 a share on March 2nd, reaching an all-time high of $27.09 a day later.

It’s currently at $14.52 a share.

Morgan Stanley said that advertisers have struggled to create Snapchat ads with “adequate completion rates.”  It also noted that app downloads have sharply declined.  In a stunning confession about their initial company valuation, analyst Brian Nowak said,

“We have been wrong about SNAP’s ability to innovate and improve its ad product this year.”

Scott Galloway, a marketing professor at NYU’s Stern School of Business, outright lambasted Snapchat’s poor leadership. Aimed at investors, he issued a strong warning to avoid the stock at all costs.

“Investing in Snapchat is like driving drunk; it’s something that no responsible person should do.”

In an interview with CNBC, Galloway didn’t mince words when speaking about Evan Spiegel.  “You are handing your money over to a 27-year-old with no rights to the stock,” he blasted.

Snapchat previously had a $20 billion valuation.  On its first day of trading, it earned a market capitalization worth over $30 billion.  Financial services and investment outlet The Motley Fool issued their own adjusted valuation.  In a piece titled ‘Snap is a dead stock walking,’ Timothy Green wrote,

“If you instead assign it the same price-to-sales ratio as Twitter, another perennially unprofitable social media company with a stagnating user base, Snap would be worth just $2.3 billion.”

The company faces a serious problem. Though it has over $3 billion in cash, Snapchat continues to invest money in expensive acquisitions. It also throws away more cash than it earns in revenue each quarter.

But that’s just the beginning.  On July 29th, the stock’s lock-up period ends.  With stocks currently way below the IPO price, worried investors may trigger a massive sell-off.

Is Evan Spiegel worried? Apparently not.  While Snapchat continues its sharp decline in the stock market, its CEO is currently on vacation.  Nervous investors recently spoke to the New York Post. They are furious that Spiegel has yet to cut short a three-week vacation with his “bro buddies.”

Spiegel, alongside his wife Miranda Kerr and friends, are blissfully sailing on a 70-meter yacht.

At Snapchat’s stock peak, Evan Spiegel reportedly had a net worth of $6 billion.  With stocks reaching a new low, the 27-year-old CEO has lost $2.4 billion.

Spiegel reportedly has no intention to return home.  The New York Post described the CEO’s luxurious ride off the coasts of Italy.

“The yacht features eight cabins, five decks, a beach club/disco, barbecue, games deck, Jacuzzi and gym — and likely no phone service, so Spiegel can stay blissfully oblivious to the shareholder tsunami of rage.”

Image by TechCrunch (CC by 2.0)

5 Responses

  1. Colin R.

    Amen!! F—- Snapchat & their idiotic CEO’s!!! Coming from someone who lives here in Venice Beach, Ca. Which is Ground Zero for this stupid company.. Our local news paper just put together a beautiful article about all of the illegalities this company’s owners have crossed by buying up properties and leases all over Venice. Places which had been artists lofts, mom & pop shops, parking spaces, & affordable housing units. Converting them all into office units or worse.. . The article in the above link is worth the read. It also shows a map of our area detailing all of the properties Snap. inc is listed as “owning” and others that they own leases on but won’t officially say that they own… Its really very frustrating here putting up with their clueless employees and terrible “security” guards roaming around on bikes and scooters all day… We have enough problems here in our community and they certainly are not helping the problems we have here…

  2. Border Guy.

    This guy dosen’t give a hoot. lol

    I guess it’s my turn. Or anyones turn.

    TO try to take him down!

    And face Facebook with true balls!

  3. HMS

    So Dan where did you get your financial degree from? Welcome to Wall Street pal. There is plenty of money to made both ways and you would have reported this correctly if you actually understood what it is you actually reported on. You seem to have conveniently forgotten when facebook went public then crashed to 17 a share, everyone was saying the same thing. Next time you report something how about doing your homework?

  4. Snapchat for the win

    There is room to have instagram, snapchat, twitter and facebook apps. I use all three. Snapchat is like having a tv station back in the day, when there were only 30 channels. I don’t know which app I use the most, but snapchat is the highest content rich app “mtv”, twitter is like a “useful” news station and facebook, well, facebook is local station where you can sometimes see your friends. I actually see facebook becoming the least used app, it is boring and repetetive. I see snapchat growing it’s userbase the most going forward.