It looks like a stock to avoid. It's parent company is currently losing money. It's user base growth rate is slowing down. The company posted a loss of $514 M against a revenue of $404 M. I'm honestly not familiar with it's clunky app. But on paper, I am not confident with its revenue generation scheme. It's business model relies almost entirely on ads as a crutch to keep itself running. (Well, it's also investing in its eyeglasses product but I don't see who its market would be.) If these ads do not resonate well with its young userbase, it will be vulnerable in the long run. I am not confident either that it has what it takes to be the next "big thing" as far as social media stocks go. On paper it looks as if the app will amount to nothing but a short term fad. I just don't see how this company could sustain itself a decade from now when its userbase has grown up. Barron's assessment is not favorable either: http://ift.tt/2kHbric
I would normally pass and avoid such stocks. I am even going as far as wondering if it would be viable to short-sell the stock at some time in the future. By then its current userbase would have grown up. In order to survive, it must evolve or hope the next generation will adopt it. Well, what do you think?
Submitted February 26, 2017 at 12:14PM by Smasborgen http://ift.tt/2msdhlu
