I shorted Snap from 23.02 a couple of days ago, but I'm just waiting for a good entry point to go long. I'm seeing a lot of nonsense flying around about Snap now, and I wanted to put in my two cents.
First let me clarify a few things. The 'we may never achieve profitability' quote from their S-1 that people keep using as some warning of Snap's weakness is just a typical legal disclaimer found in all S-1. I don't know why people keep quoting it as if it's some unique insight.
Secondly, Snap's first earnings tanked - as did Facebook's, as did Twitter's, as did Tesla's, as do a lot of tech-oriented IPO's. It means virtually nothing long term. The point of an IPO is to raise cash, and a lot of companies go public with inflated prices to raise that cash, then take the hit for a few quarter's earnings.
The reason I'm investing in Snap myself (when they're at a fair price) is that they have THE best augmented reality software around. Hands down. For all that Facebook can copy stories, their filters are just stickers placed over the live camera view. Snap filters are applied to a 3d object (your head, usually) in 3d space.
Their facial recognition is also precise and refined enough to alter features of your expression - in real time - and still look realistic. Even the most basic filters on the app widen the eyes a little, apply paling and contouring to the right spots, recognises open mouths and raised eyebrows. This is literally like live photoshopping a picture to make you attractive. If you want to know why girls in particular love this app, then this is it.
Far bigger companies are still struggling to get instant iris recognition and facial focus right. The closest competitor to this is Microsoft's Hololens, a $1000+ product, and some inferior Chinese-market apps. While Facebook (who people keep saying are going to destroy snap) have settled on stickers.
Their augmented reality is now at a level where they can not only alter complex objects in real space, but they can even remove objects from 3d space. Here is a video of the company which Snap acquired early on, which shows how powerful a lot of this is. https://www.youtube.com/watch?v=hjrLjS5kQ2k&t=2s
I know the fact they're using this incredible technology for doggy filters and beautifying teenage girls makes it easy to dismiss them, but the tech alone makes them valuable. They're ahead of almost everyone in this regard, and if you can't see that AR is the next massive growth market then you may as well just invest in Facebook and treat it like a pension fund. The fact Zuckerberg is desperately altering the fundamental attractions of everything he owns because he's so afraid of Snap should be a warning to those skeptical of it, not those optimistic about it.
People are obsessing about the ad revenue, but I think Snap are still figuring out the best way to capitalise on their own innovations. It may not even be ads, it might be turning it into a service, or selling an actual product. I think this is smart. Google and Facebook have monopolised the ad market. It's not even worth competing.
Considering this is a company which brought a successful hardware product to market, it's not hard to imagine a future where Snap combine spectacles and their AR technology. Sure, they might use this powerful tech to do something silly, like create glasses which turn everyone you see into anime rabbit-girls in real-time, or make downtown Detroit look like the mushroom kingdom, but would you bet against those things selling like hotcakes? I'm not saying they will do that, just that the possibilities are kinda wild if you actually think about them.
Lastly, I just want to say I think a lot of people are overlooking Snap because it's a fashion brand, one that appeals to trendy teenage girls, and so must be trashy. Whereas AMD, a company which makes inferior chips to Intel and Nvidia, has a crap track record, a history of issues, crap technicals, ok-ish fundamentals, and minute market share, is somehow a great and promising investment (I love AMD, but I'm making a point). I see so many of the best stocks on the market go unnoticed simply because they involve fashion, or make-up, while stuff like graphics chips and gopros gather these absurd cult followings.
I'm hoping for a massive selloff down to sub-$17. If it hits anything like $13-14 I'm going in deep.
Submitted May 11, 2017 at 07:19AM by 7506blasting http://ift.tt/2q6lq2O
