SmallCap Posted July 27, 2017 Author Share Posted July 27, 2017 I read the same thing and I was tempted, the things that held me back: 1. This has been well publicized (arguable) I did a quick google search and there are other articles and blogs talking about the same catalyst and referencing the same examples. The contrarian in me now worries that this is now so expected that it won't actually happen. 2. I have never shorted/bought puts, I have sold puts but never bought any. 3. I am not sure where in the collection of PUT exp dates and Strike amounts gives the best risk reward scenario. Can anyone help me with my thinking here? Link to comment Share on other sites More sharing options...
investor1 Posted July 27, 2017 Share Posted July 27, 2017 If I was a 30 year old engineer who was theoretically still worth millions with a 100% allocation to SNAP stock, I'd be aggressively selling on the 29th... According to this (http://www.businessinsider.com/snap-stock-price-short-seller-lockup-ending-2017-7), the employee lock-up ends August 14. Certainly early VCs will start to sell on Monday, but the last private round was at $15.36 per share - above the current trading price. Do those investors jump ship or hold on... Link to comment Share on other sites More sharing options...
bizaro86 Posted July 31, 2017 Share Posted July 31, 2017 If I was a 30 year old engineer who was theoretically still worth millions with a 100% allocation to SNAP stock, I'd be aggressively selling on the 29th... According to this (http://www.businessinsider.com/snap-stock-price-short-seller-lockup-ending-2017-7), the employee lock-up ends August 14. Certainly early VCs will start to sell on Monday, but the last private round was at $15.36 per share - above the current trading price. Do those investors jump ship or hold on... Thanks, hadn't realized it wasn't the same date. I bought the Oct puts, so I should have enough time for any selling to wash through. I should probably mention that this isn't a high conviction bet for me, there is probably no margin of safety in OTM puts at any time, and this is mostly based on market psychology. I could certainly be wrong, and the thing that worries me the most (as mentioned above) is the publicity the trade is getting, if it gets priced in it might not work... Given the huge leverage on OTM puts, if this ends up a zero it isn't a huge loss, and I'll file it under education costs. Link to comment Share on other sites More sharing options...
rkbabang Posted July 31, 2017 Share Posted July 31, 2017 If I was a 30 year old engineer who was theoretically still worth millions with a 100% allocation to SNAP stock, I'd be aggressively selling on the 29th... According to this (http://www.businessinsider.com/snap-stock-price-short-seller-lockup-ending-2017-7), the employee lock-up ends August 14. Certainly early VCs will start to sell on Monday, but the last private round was at $15.36 per share - above the current trading price. Do those investors jump ship or hold on... Thanks, hadn't realized it wasn't the same date. I bought the Oct puts, so I should have enough time for any selling to wash through. I should probably mention that this isn't a high conviction bet for me, there is probably no margin of safety in OTM puts at any time, and this is mostly based on market psychology. I could certainly be wrong, and the thing that worries me the most (as mentioned above) is the publicity the trade is getting, if it gets priced in it might not work... Given the huge leverage on OTM puts, if this ends up a zero it isn't a huge loss, and I'll file it under education costs. I agree. I took a very small position. I bought the September puts and am willing to lose the principle. If my history with options is any indication, I will sell them for a small gain and then watch SNAP plummet a few days later. Link to comment Share on other sites More sharing options...
bizaro86 Posted July 31, 2017 Share Posted July 31, 2017 One thing I hadn't considered (and I got it from a Reuters article, so you can probably assume its priced in now) is that the borrow on SNAP has been either expensive or impossible for some time. I bought the options, because I'm a small fish and I don't need to make $MM bets, but if you were a big hedge fund even if you wanted to short it you might not be able to, or the borrow would kill the idea. If enough employees/VCs sell, that extra stock will probably end up getting lent out and sold again by a short. So there is kind of a two-for-one technical selling pressure potentially, especially if enough gets out there to drop the cost of borrow. http://www.reuters.com/article/us-snap-stock-idUSKBN1AD1B5 Link to comment Share on other sites More sharing options...
rkbabang Posted July 31, 2017 Share Posted July 31, 2017 How much is priced in though? I think it will all depend on just how bad earnings are on the 10th. Much worse than expected earning on the 10th with the employee lockup ending on the 14th could be a 1-2 punch. Link to comment Share on other sites More sharing options...
bizaro86 Posted July 31, 2017 Share Posted July 31, 2017 Definitely. I still think the risk reward is attractive or I wouldn't be doing it. The earnings are a great potential catalyst. I think there is also potential for some reflexivity here, as all the negative media coverage (and potentially poor earnings) have the potential to spook some folks into selling right when their lock up expires. If the price keeps declining there is a chance fear kicks in and more pre IPO holders sell, plus the extra available borrow will allow more short selling. Link to comment Share on other sites More sharing options...
NewbieD Posted August 1, 2017 Share Posted August 1, 2017 Is there any site to see if the free float is increasing/new shares are being sold on the exchange? Link to comment Share on other sites More sharing options...
NewbieD Posted August 1, 2017 Share Posted August 1, 2017 By the way, SNAP will not be in the S&P index due to its no voting class of stock. Link to comment Share on other sites More sharing options...
ICUMD Posted November 11, 2017 Share Posted November 11, 2017 Tencent appears to have taken a 12% stake in Snapchat. They seem to be leading the way in mobile gaming in China and may be guiding Snapchat to do the same. It makes Snapchat an interesting play. If it goes to the single digits, I may start to accumulate some. They already have a fantastic network which could be valuable to lever off of. Link to comment Share on other sites More sharing options...
AzCactus Posted February 22, 2018 Share Posted February 22, 2018 Snap just gave their CEO 638 mm worth of stock. For frame of reference their top line was 825 mm last year. Imagine, a private enterprise that has a top line of 8.25 million giving their CEO a bonus of 6.38 mm. In the meantime, the company lost tons of money. I hope someone can let me know I'm wrong. Link to comment Share on other sites More sharing options...
racemize Posted February 22, 2018 Share Posted February 22, 2018 Snap just gave their CEO 638 mm worth of stock. For frame of reference their top line was 825 mm last year. Imagine, a private enterprise that has a top line of 8.25 million giving their CEO a bonus of 6.38 mm. In the meantime, the company lost tons of money. I hope someone can let me know I'm wrong. Apparently mostly a one time bonus for IPOing, so not recurring. Although i would think the liquidity would have been enough of a bonus for a large stakeholder... Link to comment Share on other sites More sharing options...
plato1976 Posted October 6, 2018 Share Posted October 6, 2018 now it's under 10B with near 200M users, anyone interested? Link to comment Share on other sites More sharing options...
cameronfen Posted October 7, 2018 Share Posted October 7, 2018 now it's under 10B with near 200M users, anyone interested? Haven't looked at this, but unless growth significantly reaccelerates somehow, I don't see long run users go above 300M. $33 a user is quite cheap at first glance, but twitter, which probably commands less stickiness in terms of ads but has more useful data to mine, has an arpu of $8.00 and is declining to flat over the past couple years. If the long term ARPU numbers are only $8.00 for SNAP, it better have margins like facebook to justify even $33 a user. (.3*8 = 2.4 profit per user, 33/2.4 is roughly a 15x multiple). I think that is optimistic. Link to comment Share on other sites More sharing options...
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