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- SNAP Daily Active User growth is growing at a much faster rate than revenue (19% versus 6% in Q3), which speaks poorly of SNAP’s ability to monetize its user base.
- None of SNAP’s product initiatives will pay off quickly from a Revenue growth standpoint (should they pay off at all).
- You can’t cut your way to prosperity. SNAP’s 20% RIF was long overdue but will not help the topline. SNAP’s expense structure has been out of line since Day 1, yet this is typical of modern-day venture darlings where the culture is to maximize growth at the expense of operational efficiency. VC’s simply want portfolio companies to maximize growth so that VCs may maximize the value of the next venture round in Venture Capital’s game of musical shares (the Fed has thankfully stopped the music for the moment).
- SNAP should focus on profitable acquisition targets to help grow operating profits and cash flow. Most of SNAP’s M&A target list likely consists of private companies and ought to include payments/ecommerce companies to enable more SNAP users to conduct online transactions in various ways.
- The truth is that SNAP should not exist and only does because of the Fed’s easy monetary policy of the past 15-20 years. SNAP is a zombie company in the making, perhaps it has already turned.