Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
Login My Member Benefits Archives Research Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    ×
  • Subscribe
Enter stock ticker or keyword
×
Join 100,000+ Like-Minded Investors Today
Twitter
Tags: IPOs

The Next Six Months Will Be Critical for Your Money (and Snapchat)

This expert insight from Keith Fitz-Gerald originally ran in Total Wealth on May 15, 2017

View Comments

Start the conversation

Comment on This Story Click here to cancel reply.

Or to contact Money Morning Customer Service, click here.

Your email address will not be published. Required fields are marked *

Some HTML is OK

Keith Fitz-GeraldKeith Fitz-Gerald

Yesterday's conversation during the ride home was about as damning an indictment of investment potential as I've ever heard...

Do you use branded filters?

...No.

What's your favorite company?

...Huh?

Which of the highlighted stories do you read regularly?

...None.

Let me tell you why this conversation is so relevant to your money.

The next six months will be critical.

My youngest son and his best friend sat in the back seat with a look on their face that fluctuated somewhere between bewilderment and deep thought as my colleague and good friend, Matthew Coble, peppered them with questions.

Sign up for SMS so you never miss special events, exclusive offers, and weekly bonus trades.
"Snap's management is delusional," he pointed out.

I couldn't agree more.

The company is still the most dangerous IPO I've ever seen.

The boys are 15 years old and both use Snapchat extensively to interact with their peers. Yet, neither could recall a single one of the fundamental variables that make the company such a "valuable" property on Wall Street despite the fact that they are supposedly the primary demographic.

Filters... no business value, just occasional comedic relief.

Branding... complete breakdown in the user experience with not a single company retained in their memory banks despite being bombarded by advertising (and ignoring it) as they use the app.

Cultivated stories... the primary demographic doesn't give a you-know-what.

Matt, who is a digital strategy expert with more than 20 years of experience working with the world's top brands, then went for the jugular: "Snap's business model is a joke because there is no business model that will allow the company to sustain the platform with sufficient revenue to run it."

Precisely.

The company lost $2.2 billion during its first 90 days as a public company. That takes talent - sarcasm fully intended. It will lose gobs more money in the months ahead.

CFO Drew Vallero said during the analyst conference call thatĀ Snap Inc.Ā (NYSE:Ā SNAP) is "still in investment mode," which strikes me as Wall Street speak for "we still expect gullible investors to buy our stock."

Right.

The one metric you'd want to see is going in the wrong direction - user growth is decelerating.

So now what?

IPOs Are a Rigged Game You Don't Want to Play

When I came into this business more than 35 years ago, companies with legitimate business models and real cash flow went public because they needed additional capital to grow already viable operations.

Now companies go public because they've got an idea they hope to "monetize." More often than not, they're huge money losers hoping to "cash out" on your dime - like Snap has.

Back then, going public was something you did when you wanted to stay in the game. Now, founders and early investors are looking to the individual investor as an exit - meaning you are going to make them worth billions instantly, even as they transfer all the risk of ownership to your wallet.

Case in point, 26-year-old Snap CEO E…

 

Join the conversation. Click here to jump to comments…

Keith Fitz-GeraldKeith Fitz-Gerald

About the Author

Browse Keith's articles | View Keith's research services

Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.

… Read full bio

Login
guest
guest
1 Comment
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
THOMAS DAVIS
THOMAS DAVIS
6 years ago

As a Money Map subscriber for many years, I have come to greatly respect your stock and industry picking ability. T Davis MD

0
Reply


Latest News

June 7, 2023 • By Garrett Baldwin

(no title)

June 7, 2023 • By Garrett Baldwin

(no title)

June 7, 2023 • By Garrett Baldwin

A picture containing text, screenshot, font, line Description automatically generated
Postcards: This Value Strategy is Great for Finding Breakouts
Trending Stories
ABOUT MONEY MORNING

Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

QUICK LINKS
About Us COVID-19 Announcements How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Archives Profit Academy Research Your Team Videos Text Messaging Terms of Use
FREE NEWSLETTERS
Total Wealth Research Power Profit Trades Profit Takeover Penny Hawk Trading Today Midday Momentum Pump Up the Close
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Night Trader Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Extreme Profit Hunters Profit Revolution Quantum Data Profits Live Trading Alliance Trade The Close Inside Money Trader Expiration Trader Flashpoint Trader Darknet Hyper Momentum Trader Alpha Accelerators Weekly Profit Cycles Brutus Alerts Resource Traders Alliance

Ā© 2023 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

Address: 1125 N Charles St. | Baltimore, MD, 21201 | USA | Phone: 888.384.8339 | Disclaimer | Sitemap | Privacy Policy | Whitelist Us | Do Not Sell or Share My Personal Information

wpDiscuz