I need to calm down. My enthusiasm for $SNAP has been ignited. As Renée Elise Goldsberry reminds us in Satisfied, let's "Rewind, Rewind"...
Last month, on June 11th, Snap held their 2020 Snap Partner Summit.
I've never held deep opinions about Snapchat. When it IPO'd on March 2, 2017, there was much fanfare.
At the time, Reuters reported:
Snap Inc’s shares ended up 44 percent on their first day of trading as investors flocked to buy into the hottest technology stock offering in three years.The stock closed at $24.48 on the New York Stock Exchange on Thursday, well above the initial public offering price of $17 per share on Wednesday, giving the company a market value of $28.3 billion.
A year before I had actually given it a spin.
Truthfully, I liked the product. I just wasn't the demo. It didn't hold any value to me if none of my peers were on it. There was nobody to, as they say, "chat." So I quickly left. That doesn't mean it wasn't investable. It just wasn't for me, and subsequently, off my radar. For years.
Looking back, I didn’t mind sitting on the sidelines as it plunged more then 80% from its IPO to a December 2018 bottom. Not exactly something I was having FOMO about.
But this craving changed last month. The 2020 Snap Partner Summit.
Rich Greenfield from LightShed got the ball rolling (June 11):
Think about the degree of innovation laid out today by @Snapchat -- then think about how the dinosaurs of legacy media rollout apps, say they have a digital/streaming strategy and then do almost no iteration for years
Then the next day, he kept at it (June 12):
And he kept reminding me of it (June 23):
And again (June 29):
Like, okay Rich, I get it. I should take a look. So I started taking notice.
During this time (June 15), Packy McCormick also piqued my interest when he published “Oh Snap! The Next Great Platform Company Everyone Forgot About” (oh hey substack!).
I love his quirky takes where he argues the following:
Hype Cycles: We are catching Snap at the right time, as it’s heading up the Slope of Enlightenment. Others will slowly begin to wake up to Snap’s potential, you heard it here first. Worldbuilding: Spiegel and Snap are patiently laddering towards a long-term vision so big that most people missed it. Mirrorworld: Snap is building the next major platform - Augmented Reality. Aside from being a lot of fun, AR presents an internet-scale financial opportunity.
Sounds pretty cool, right?
Other highlights include:
So while us olds sleep on Snap from the outside, millions of younger best friends spend their entire lives communicating in there. We all underestimated Evan. Worldbuilders are rare. Bezos, Musk, Carta’s Henry Ward. When you find one, you bet on them. I’m a little late to the party, but not too late. Snap is right at the beginning of the climb up the Slope of Enlightenment.
So at this point, my spidey-sense is officially up.
Then, the pièce de résistance. I see Turner Novak tweet his Q2 portfolio update.
Blink twice and you might miss it in the infinite scroll of Twitter. Is that Snap at more than a quarter of his portfolio? Why yes, yes it is. Why Turner, why?
So I asked:
Turner gave me homework! His piece, (more substack!), “A Deep Dive on Snap's Content Business, Augmented Reality Plans, and Valuation,” transformed my thinking of Snap. I won't quote him because the piece is two years old, but while some of the numbers and metrics may be dated, the premise and core theses are intact. If anyone wants to learn more about Snap (as I did), this is awesome place to start.
This line also stuck with me:
“A platform (Apple) with content (Disney) and advertising (Google).”
#1: At its core you have a social media platform with strong and growing daily active user numbers:
#2: With some pretty legit reach of valuable demographics:
(Screen grabs ⬆️ and ⬇️ from most recent earnings presentations).
#3: With completely underdeveloped monetization. (Facebook's ARPU was $34.18 for US/Canada in Q1 of this year, 10x of Snap's!)
#4: With a ton of room for growth:
#5: But above all, a bet on Snap is a bet on their crazy-innovative product strategy.
Some of these product highlights from the Partner Summit include: