Seeking Alpha

Bloomberg: Alibaba looking to invest in Snapchat at $10B valuation

  • Bloomberg reports Alibaba (Pending:BABA) and other investors are in talks with Snapchat to invest in the ephemeral messaging service at a potential $10B valuation.
  • Last year, Snapchat was reported to have rejected a $3B+ offer for Facebook; one report stated Google made a $4B offer.
  • The reported valuation is on par with the pre-IPO target set by Asian mobile messaging giant Line (OTC:NHNCF), which has far more users (470M+ registered) and revenue ($338M in 2013) than Snapchat. It's also equal to 53% of the $19B price paid by Facebook for WhatsApp (500M+ active users).
  • Alibaba has been on a huge investment spree ahead of its IPO, which is expected to arrive at some point after Labor Day.
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Comments (16)
  • Tales From The Future
    , contributor
    Comments (5789) | Send Message
     
    $3, 4 and now 10 billion. Who wants to bid more?

     

    Yup, no tech bubbles to be seen anywhere...move along, count the eyeballs and kindly forget about the fundamentals.

     

    Buy, buy, buy as long as Miss Yellen fuels the party with ZIRP money.

     

    These valuations will soon come crashing down to earth as soon as the FED is withdrawing its stock market party sponsorship.

     

    It could end after seven years again: 2000, 2007, 2014?!
    30 Jul 2014, 10:51 AM Reply Like
  • zeikette1
    , contributor
    Comments (77) | Send Message
     
    Im sure that as soon as obama's last year comes around all this will stop. knowing he will be stone walled for his last 11 months in office. The " new guy" will ( hopefully, for the sake of keeping america ours) close up all this zirp and other elitists insider trading with "free money". THEN i think it best to close out all positions end of Jan -Feb of 2015 .
    30 Jul 2014, 11:53 AM Reply Like
  • Itchygonads
    , contributor
    Comments (86) | Send Message
     
    "$3, 4 and now 10 billion. Who wants to bid more?"

     

    Google?
    I'm a conspiracy theorist so I dont expect our elitists to let a good few new Chinese billionaires on the scene so easily via the BABA IPO.
    They're already in the process of eliminating the Russians from our market place...
    30 Jul 2014, 07:07 PM Reply Like
  • Paulo Santos
    , contributor
    Comments (24973) | Send Message
     
    AMZN needs to ask BABA how its massive investments don't destroy earnings.
    30 Jul 2014, 10:53 AM Reply Like
  • Guy in Ithaca
    , contributor
    Comments (427) | Send Message
     
    Sounds like a lot. Hope they know what they're doing. I presume Jack Ma is behind this? Looks like Jack is much better at "shopping sprees" than Marissa Mayer, except for him they're calling it an "investment spree." What the heck is the difference? Sort of makes the Flurry investment at "a few hundred million" look incredibly smart.
    30 Jul 2014, 10:56 AM Reply Like
  • buyandhold???
    , contributor
    Comments (907) | Send Message
     
    Fellas, dont wanna burst your bubble but they arent investing $10B they could be investing $50M at a valuation of $10b. I mean UBER is $20B for goodness sakes, they're silly valuation but they are what they are. The bottom line is BABA is more than likely investing no more than $500M if that.
    30 Jul 2014, 11:39 AM Reply Like
  • Tales From The Future
    , contributor
    Comments (5789) | Send Message
     
    That's certainly true and BABA will be awash with cash once the IPO is over, wasting a few millions won't hurt them.

     

    But the valuations are still crazy, these chat apps virtually all do the same thing (Whatsapp, Viber, LINE, Snapchat...).

     

    There is nothing unique about them, software features can be copied within weeks by competitors and once monetization efforts are kicking in the (young) users will quickly switch to another messaging app...eyeballs and valuation will vaporize.

     

    These apps are simply loss leaders to lure users into an ecosystem or in the case of FB retain younger users no longer interested in its core FB product.
    30 Jul 2014, 11:42 AM Reply Like
  • Pete P.
    , contributor
    Comments (800) | Send Message
     
    Correct buyandhold. It's an investment, not a buyout. Maybe Ali sees huge potential for Snapchat in China. At $10 billion, snapchat will have to do A LOT of GROWING to grow into that valuation.

     

    Although, the Whatsapp acquisition for $16 billion seemed even more ridiculous, but who's going to question Mark Z.
    30 Jul 2014, 01:43 PM Reply Like
  • name999
    , contributor
    Comments (175) | Send Message
     
    Very interesting!
    Considering that Tencent and Alibaba are competitors in many areas now, and Tencent was already a covert investor in Snapchat's last round, what will they do if both of them are on the board of Snapchat?
    30 Jul 2014, 12:05 PM Reply Like
  • MIaffal33
    , contributor
    Comments (90) | Send Message
     
    Am I missing the appeal with Snapchat?
    30 Jul 2014, 12:40 PM Reply Like
  • Paulo Santos
    , contributor
    Comments (24973) | Send Message
     
    You need to be a teen to understand it.
    30 Jul 2014, 01:00 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (10611) | Send Message
     
    This, if true and successful, should probably be seen in conjunction with Yahoo!'s efforts and acquisitions in social. I think it is not totally out of the question that Alibaba might take over Yahoo! after the BABA IPO; that way also finding an easy solution how to deal with Yahoo!'s stake. Very interesting times ahead.
    30 Jul 2014, 12:41 PM Reply Like
  • Pete P.
    , contributor
    Comments (800) | Send Message
     
    Very interesting indeed! :-)

     

    At some point over the next 6 months (I think) we should find out about all of the innerworkings going on.
    30 Jul 2014, 01:45 PM Reply Like
  • Aries Wu
    , contributor
    Comments (64) | Send Message
     
    Snapchat is mobile data intensive, I would rather to use it on wifi unless mobile service provider willing to give bigger allowance for the app. Mobile service provider? OH, ya alibaba got its mobile license in China not that long ago...fishy?
    31 Jul 2014, 01:21 AM Reply Like
  • NLTInvestor
    , contributor
    Comments (349) | Send Message
     
    Lol what a joke. Snapchat worth 10 billion... you're telling me snapchat is worth more than ADT, Ares Capital, Coach, SolarCity, First Solar.
    31 Jul 2014, 12:59 PM Reply Like
  • Pete P.
    , contributor
    Comments (800) | Send Message
     
    You are right. Valuations are silly.
    4 Aug 2014, 10:38 AM Reply Like
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