Strategy Shift, Long SNAP in 2018; Stable IPO $20-24 Range
Snapchat is an Advertising Platform that leverages camera hardware using AR and Geo Location in order to create small, bite sized entertainment experiences that become cyclical and habitual for users. That they called themselves a camera company in 2017 was ludicrous and out of line. The new design leans heavily towards this model and focuses more on AR (which they should given that the iPhone X is starting to propagate a paradigm shift in personal connectivity to hardware and environment) to maximize the camera hardware via software.
They have a really great auction system in place and there's a shift internally with empowering the community (finally) that will eventually start to bear fruit if they give these new initiatives proper love and attention. It's a huge pivot, but one that I think they're starting to understand. Being able to let community and companies directly control exposure in order to generate revenue is a total win, especially with the format that Snapchat uses. They're letting companies sponsor promoted stories, which I feel trends towards this new operational structure. They just have to continue to execute well and the stock will start to pop it's way back up.
The advertising side of the business is growing exceedingly well and is positioning itself in the best way possible for Snap to leverage it into the future. User base is also increasing, along with the new Lens Studio program, so overall the story for Snapchat is positive (minus all the people fighting the redesign - as usual). I think an accumulation period in April should be watched for before the next earnings call. We're heading into Spring Break, music festival season, baseball and the Spring/Summer momentum shift. Market conditions remaining positive, next EC could be another good trend upwards.
They have a really great auction system in place and there's a shift internally with empowering the community (finally) that will eventually start to bear fruit if they give these new initiatives proper love and attention. It's a huge pivot, but one that I think they're starting to understand. Being able to let community and companies directly control exposure in order to generate revenue is a total win, especially with the format that Snapchat uses. They're letting companies sponsor promoted stories, which I feel trends towards this new operational structure. They just have to continue to execute well and the stock will start to pop it's way back up.
The advertising side of the business is growing exceedingly well and is positioning itself in the best way possible for Snap to leverage it into the future. User base is also increasing, along with the new Lens Studio program, so overall the story for Snapchat is positive (minus all the people fighting the redesign - as usual). I think an accumulation period in April should be watched for before the next earnings call. We're heading into Spring Break, music festival season, baseball and the Spring/Summer momentum shift. Market conditions remaining positive, next EC could be another good trend upwards.
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