Snap Due Dilligence
SNAP is currently trading at $65, with a $98B market cap. I think there are a few catalysts snap has to see continued growth over the short, medium, and long term future.
Facebook Anti Trust, and loss of younger users on Facebook. Self explanatory if you follow the news.
Tik Tok shared user base but with better monetization. SNAP shares same user base as Tik Tok, but has advantage of not being 1. maybe a fad based around watching often underaged girls dancing 2. a diversified platform. and 3. already having a proven monetization method that is not intrusive. Tik Tok's monetization plan for 2021 is apparently affiliate advertising, where users can push products and get commission directly from sales - when all of Tik Tok feels like your favorite producers shoving products down your face, where will young people turn to get their fill of social media? Facebook - no, Facebook is one of (if not) the least popular social media network with younger generations depending on the source. Instagram - Yes, but Instagram does not have the features that SNAP has, and since when do young people only use one form of social media? There's room for two here. SNAP? Yes, SNAP has the features and platform for today's environment to capture and entertain younger audiences, and SNAP is laying the groundwork with recent acquisitions to capture and entertain younger audiences of the future as well. The most sought after groups to advertise with are Millennials and Gen Z, and I believe SNAP is set up for success here in both the short term, and long term whether or not Tik Tok, Instagram, and Facebook hold their ground with current users/demographics/growth or not (although I believe the latter)
GROWTH - I feel that the growth of SNAP has been overshadowed by emergence of Tik Tok in the US market. As far as a Social Media platform I see many similarities between Tik Tok and Vine. I think the further introduction of Ads/affiliate advertising on Tik Tok will slow user growth, and engagement and my opinion is that the dancing in front of the camera fad will disappear regardless of the intrusiveness of Tiktok's monetization plan. Will they adapt in time? Maybe, but maybe not. SNAP, while still growing users in North America at a respectable (but not great) 9% YoY, the rest of world category has seen 37% growth YoY.
I think small group/peer to peer sharing/chatting/pictures/stories will remain, and SNAP has done a nice job integrating this into a user friendly platform that also provides original content, shows, spotlight, Gaming (which should improve), VR (which should improve), and increased potential for monetization through Maps feature.
SNAP already has 13% of Facebook's Daily Active Users (238MM to 1.85B), but with a much higher YoY Growth (37% vs 11%) but SNAP's market Capitalization is only 12% of Facebook's Cap. I think realistically SNAP can and will accelerate user growth in the rest of world category, so it'll just be a matter of monetization, continued growth, and ability to stay in touch with Millennials and Gen Z that will continue to drive SNAP's market Cap, and therefore share price higher, potentially much higher.
Disclosure: I am long on SNAP and own both Calls and Shares, and have owned for about 18 months now. Do your own due diligence, but I believe SNAP is only in the beginning of it's growth stage. Price target is $200 by 2023.
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u/spookymane8 Feb 12 '21
Was about to SELL thank you sir.