Snapchat, did everyone snap the dot-com bubble?

“Don’t worry, this time it’s different.” Of course, it would be irrelevant to assume that given two circumstances look alike while separated by a significant period of time then the consequences would obviously be the same. Between the year 2000 and now, the world did change considerably.

However, similar causes often lead to grossly similar consequences; and similar doesn’t mean identical. Snap Inc. (SNAP), the company behind the messaging app Snapchat, has made its IPO, witnessing its stocks soaring 44% on their first day of trading and therefore valuing the company at around USD 28.3 billion.

With USD 404.5 million in revenues minus USD 514 million in losses in 2016, Snapchat that still loses more than it gains is now on a par with giant retail company Target (TGT) in terms of market valuation. Nobody doubts that Snapchat is very popular as its claims 158 million users.

However, whatever the growth prospects in the volatile and changing App sector, one should mostly focus on figures rather than on popularity. Indeed, what a product like Snapchat tells everyone about its users – and thus its revenue source – is that demand can vanish or switch to another product without a trace – and possibly market valuation too.

Follow Us

facebooktwitterrssmail