You have money to invest and some turtle necked thick circular rimmed glass wearing hipster meets you in starbucks for a triple mocha frappe Mexican soy bean decaf expresso with cream and pitches you his great investment opportunity...
"We are a company that IPO'd last year and our share price has fallen by over half since , we have never made a profit since we IPO's and are still making over $1m a month loss, but the loss quarter on quarter are reducing (almost in a perfect example of special cause variation we started with an estimate of -16c per share loss and achieved -14c, next quarter was -14c and we achieved -12c, next quarter was -12c and well you guessed it -10c, I wonder what the next quarter will be anyway lets get back to it)
"The more users we allow onto the platform the more expensive it is to run (Just work out cost per user versus profit per user) so we cant ever really go above the 200m user level and we are going to fundamentally have to change the user experience to actually make real money so we can be profitable, but we don't know how this will inpact our user experience".
WOULD YOU INVEST IN THIS
Long term downwards trend could not break with recent pop and even with "An beat", Jesus it should only be an beat if it actually has so profit to talk about for fuck sake. Its showing signs of weakness, but its up over 100% this year - IDIOTS, well its down over 100% since fucktards.
It also could not break the 20day with this announcement.
My overall view is this period is a critical one for SNAP, it needs to at least hold its 100day or even break the 20day and the down trend if it can do this then its a buy all day, however its not now I would not be surprised to see this back at $6 before the end of Q3. lol what company has 190m customers and cant turn a profit lol.
SNAP really needs to fix its cost per customer, however the signs are its focused on revenue per customer which essentially means its margins are small so growth will be small, unfortunately if SNAP announces it turned $1 profit in the next quarter idiot investors means SNAP will be a $100 stock in days.
The issue with focusing on revenue per customer is that your essentially trying to change customer behaviour which for a large part is outwith your control and initially focusing on cost per customer is 100% within your control and is essentially easier to change, plus this gives you a great foundation is formed for growth. Until I see signs around reducing cost per customer unfortunately SNAP is a main stay on my short list
SWING SHORT Target $10 test (Ideally would be back to $6/7 area) Risk $13 all before next earning,
Prediction: Next will read -8c per share loss with increased operating costs around 190m users and increased revenue per user
Thanks for reading @D0CT0R__WH0