Snapchat IPO! Will I be Loading up on Snapchat shares?

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Good day subscribers thank you so much for joining me today i am jeremy this is the financial education channel and today we’re talking about snapchat in the potential snapchat ipo that could possibly possibly be coming in the future it’s been rumored that it’s very close there in deep talks with companies about going public for a certain valuation they seemed

Attractive and co within the coming year this is the now the time to fund finally go public but nothing’s for certain yes so we’re only looking at the potential ipo process and the only reason i’m eating doing this video today is because like i have at least 10 people requests in the past week literally over ten people within the last week requests that i did

A video specifically covering snapchat in the potential ipo situation in my thoughts on it and all those kinds of things so i’m here to talk you guys through the process today and and tell you a little bit about snapchat and come just educate you and we’ll kind of look at some different things on you know should you buy snapchat should you not well i be buying

Snapchat we’re gonna get into all those things today so first off what is snapchat snapchat is is a fun messaging app that’s on android iphone you can capture a photo or a brief video with it then add caption or doodle or filter lens over top and send it to someone else you know a friend or whatnot you can add your snap to your story a 24-hour collection of all

Your snaps that’s broadcast it to the world so say you’re on vacation you’re in hawaii you can add all these snaps to a story basically and so if somebody who logs on and there are a friend of yours on snapchat they can go in and see oh this is all of the you know the things they did in hawaii today they’re all like 10 second or five second clip so oh yeah we’re

At the luau now or on the beach this and that so you can put it all into a story let’s go back here but these are me are merely part of many features within snapchat yes that this course snapchat is used to send photos and videos to friends your friends can view those snaps for up to 10 seconds and then the snaps disappear well that’s all fine and dandy man and

People still left stumped by snapchat but basically at its core it’s basically a way to yourself on video or photos that’s basically what it is in mainly video you know you take a quick snap and talk about whatever you want to talk about five or ten seconds and that’s it or show whatever you want to show and that’s basically the service that is the main guts of

The service that’s why most people use snapchat to be honest and the whole ten second thing that was kind of cool at first i remember when i first heard about snapchat was like that’s pretty innovative that’s something different than i thought that’s kind of dumb because you know what somebody could just you know screenshot their phone if they wanted to keep their

Phone it doesn’t take a rocket scientist to figure out that so how much of that even matters now is beyond me but that’s basically what snapchat is it’s it’s a photo and video sharing service with your friends now this is interesting this came out in this past summer snapchat passes twitter in daily usage snapchat has 150 million people using a service each day

Said people familiar with the matter this makes the four year old messaging app more popular than twitter by daily active user so that is that is pretty amazing to our excuse me 150,000 people using the service each hour excuse me 150 million people using the service each day think about that guys that is a massive amount of people that’s almost half of the united

States using the messaging app every single day not just like using the service you know once a month or once a week that’s every single day that hundred and fifty million number so that’s very impressive so we can see that snapchats a huge service there’s certainly no facebook or buy by any of you no stretch of the imagination but they are a monster now how does

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Snapchat make money guys this is the next thing you know how did they make money they basically make money from ads they do the same thing everybody else does except the format is different in snapchat they’re they’re called sponsored they’re called like sponsored stories and things like that that you can click on it and a brand could do like you know an innovative

Like i guess you could say it more authentic type commercial showing off things and you can watch it that way sometimes in a filtered lens you’ll see and the background it will show you know a movie poster or whatnot big movies have paid a lot of money to snapchat to have a featured lens type situation and people take their picture and the movies the backdrop and

Then those people share it with their friends and so on and so forth so those ways that’s how basically snapchat making makes all its money now it’s basically from ads they’re just served up a little different than everyone else you know on youtube for instance ads are served up either on the sidebar or they’re served up but you know before you watch the video at

The very end of the video snapchat it’s it’s served up you know when you’re going through your friends feed and whatnot sometimes at the bottom of it those kinds of things so basically they’re there an ad service now they will have some money coming in some other different ways in the future and we’ll get into that as we go on here now how much revenue does snapchat

Actually make so snapchat reportedly this is reportedly is not like for sure stuff this is reportedly from you know this source and that source they’re hoping to generate a hunt a billion dollars by 2017 so next year a new report from emarketer says the company is set to generate three hundred sixty six million dollars this year the year we’re currently in in ad

Revenue and next year close to a billion dollars so we see phenomenal growth over three times the amount of money or around three times the amount of money they expect to make more next year than this year and that’s a huge amount to go from 366 billion to a billion dollars in revenue that’s a monster jump but it’s not unprecedented we’ve seen this from facebook

When it’s earlier growth mode we’ve seen this from twitter sometimes you know when you’re growing from the hundreds millions into that billion category it’s actually really easy when you’ve got such a big a big network and then all of a sudden advertisers come in they’re like okay we need to start advertising on this service because it’s super cheap and whatnot

So they all start coming in at once and then that just makes the revenue go up substantially but regardless that’s huge revenue growth 366 million to 1 billion if that stays true that’s really phenomenal now listen to this guy’s facebook they tried to buy out snapchat for three billion dollars reportedly in 2013 now the snapchat was made in late 2011 so imagine

That guys imagine being that 22 year old or 21 year old whoever the guy that created this app you go from being college you know and nobody having no money and within two years your app is worth three billion dollars and then you don’t even sell it you don’t sell it because you’re like you know i think we’re gonna get a lot more money than that in the future it

Was a good move by him for not selling it the same way it was a good move by zuckerberg to not sell facebook to one of the companies i don’t want to buy them out in the early days but imagine that imagine turning down a three billion dollar deal when you built that company in two years or less in two years three billion dollars that’s a lot of money to turn down it

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Just shows you the power of apps basically and what it’s basically transformed the whole economy unbelievable really simple stuff and yes you know i’m not surprised facebook would try to buy it so let’s talk about this initial public offering snap is working on an initial public offering that could value the fast-growing virtual messaging company at twenty five

Billion dollars or more making it one of the highest profile shared a buttes in years possibly signaling a turnaround in the new issue market so around twenty five billion dollars are up valuation am i surprised by this not really we saw facebook who you know they were a lot bigger than snapchat at least from what we’ve heard about snapchat user wise in revenue

Wise facebook was much bigger so facebook actually i peeled around 90 she gives me 92 about a hundred billion where snapchats value and you know 25 to maybe 35 billion so that’s around the range i would expect snapchat to come out out know something i want to talk to you guys about real quick is when a company is doing ipo and this is one of the reasons i actually

Don’t invest in ipos you know when they first come public like this and you don’t buy it in the first week or even the first month for that matter when a company comes public at an ipo do you think the owner of that company do you think the main shareholders are gonna sell that for a discount by any stretch of the imagination heck no they’re gonna try to get there

Only a cub public if they’re getting the maximum a maximum maximum amount of money for their there’s because they’re gonna have to give up some to even go public in the first place so unless they’re gonna get a great deal they’re not gonna go public in the first place so you’re probably not getting a great deal as a shareholder if you buy into that ipo right off

The bat unless you hold it for years and years and years and you believe in that service or that company for years to come then maybe it’s worth buying it you know initially rate early on because you like i just want to get in i don’t want it to go up more you know i just want and keep holding my shares for that 10 20 years or whatever that’s fine and dandy but if

You’re putting i’m getting ready to those shares within the next year or two it’s not really smart to play ipos in my humble opinion just because they’re not generally speaking they’re not valued correctly they’re usually overvalued because who’s gonna take what i saw my company for an undervalued price well i saw my little photo and video company that’s growing

What i saw that for a price that’s less than it’s worth know what i saw this channel for a price that’s less than his worth no i wouldn’t sell this channel no matter what but still i’m trying to get to cross my point you’re not gonna sell something that’s growing unless you unless you know what i mean you’re not gonna sell unless you’re getting a great great value

For it because there’s no reason to sell in the first place they got plenty of cash they can go raise money in them in the private market and whatnot it’s nothing for them so i want to get that out there now let’s look at this this is i would say them the biggest stock offerings that came out within the last obviously five years there’s one is facebook which came out

Public may 18 2008 2012 excuse me and the other would be alibaba which came public about a year or two ago but looks like a facebook for instance facebook came out may 18 2012 they came out a share price of $38 that first day they closed at $38 and 23 cents so barely up now let’s go all the way down and look what the price was august 20th about six months later less

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Than six months later actually the price was twenty dollars a share guys huge drop uh huge drop in facebook by the way around that time in that august timeframe i was buying facebook shares all in that low $20 even as low as 19 $18 it even touched into the 18 that one and i had like a $19.90 cost basis unfortunately i sold that a few weeks later when the stocking

Went up to i think like twenty to twenty three dollars so i sold it like a because now facebook shares are freaking like $120 a share and it’s four years later so i’m like oh why did i why did i do that but you know that’s what happens but bottom line is you can see that the facebook you know there was a growth engine that was a monster in there there sure price

Got nailed on that guy’s it really did it went they dropped half their value so that could happen a snapchat so you’ve got to be you got to be ready for that if that does happen so if you think you’re just gonna automatically make a ton of money by getting in snapchat and doing a short term train on it yeah you could but you also might lose a ton of money like you

Would have if you would have done facebook and try to hold it first short term then you’re holding that $20 you’re like crap i don’t even want these shares in the first place no why did i buy facebook at that time i could see facebook’s vision i understood facebook really well will i be buying snapchat no i will not be buying snapchat because i don’t understand

Chats business model enough in my opinion i don’t see enough vision in it for me personally and for those reasons i will not be buying the snapchat ipo but like i said i did buy facebook when it dropped to $20 you know twenty one dollars $20 $19 i was buying at that time i should have held for longer but i started investing in other companies i thought had more

Potential but i understood facebook i really understood them and i believed in the growth and all those kinds of things so when you’re investing an ipo guys it really comes down to do you believe in that company do you want to hold it for the very long term very long term i mean three five ten years in the future at least three years minimum three years minimum

Because they’re not selling that company for cheap price guys they’re not so that’s what it comes down to an ipo do you see a real huge long-term vision for that company if you do with snapchat then it might be a great one for you if you don’t and you’re not a huge believer in it that i would say stay away because why would you want to get involved with something

That could do what facebook did go from $38 where when an ipo down to 20 and then you’re stuck holding shares of $20 a share and you know you could have been involved with a company that you really believed it so that’s kind of my take on it guys so i will not be buying snapchat shares but i will be following the company i’ll see i’ll see hey maybe does something

Happen like happen to facebook where it loses half his value within a few months after then maybe i go dip my toes in a little bit we’ll see what happens guys i hope this helped you guys immensely today understanding snapchat all you guys that you know requested this video and if you have not subscribed you may want to i’ve talked to tom about the stock market on

This channel like we did today talk about entrepreneurship i’m an entrepreneur i talk about entrepreneurship and we talk about personal finance on this channel every single week thank you for watching guys and have a great day

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Snapchat IPO! Will I be Loading up on Snapchat shares? By Financial Education

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