Spiegel & Murphy have the best vision of any major internet-tech stocks. They've executed flawlessly, despite major backlash from nearly every corner of the world including Wall Streeters, Hollywood B-listers, and tons of freaks on Seeking Alpha who were pushing their incorrect short cases. What have the founders of SNAP done so well?
Murphy & Spiegel Product Vision => unparalleled
Murphy and Spiegel decided to not wait or dull-down their UI shift in 2018. While costly for the stock ONLY, they made the correct decision as can be seen by the disaster which became apparent with Cambridge Analytica. The zuckerberg selling his users data fiasco was just the tip of the iceberg for FB's problems-- problems Snapchat has avoided since the very beginning. In fact, Snapchat was built with the idea in mind to fix all that was wrong with Facebook-- and theres was plenty wrong and getting wronger. Snap mgt correctly assessed that maintaining the ability of its users to connect was of the UTMOST important. While FB mgt sold themselves to the highest dollar bidder, Snap chose to reiterate its commitment to everyday users and their PRIVATE conversations-- even to the extent of pissing off celebrities who had leached off Snapchat's platform (see Kartrashians). Not sure why Wall St would view Kartrashian's bashing Snapchat as a bad thing, but they did, and the stock went from $20 to $13. Even amongst the flack SNAP took for the decision, they managed to lose only about 4-5% of users in 2018 but returned to growth after that with a MUCH stronger product. Not only did they make the proper changes in 2018 but also continued to ADD to the successful platform with Lens Studio, Bitmoji, Games, and TV. Snap has been cranking out successful products like no other major tech company peer. It's been eye-opening to watch as Murphy and Spiegel seem to see what's coming well in advance of everyone else in tech (sans Apple-- they pretty good too with AirPods and Apple Watch).
Near-term target: $40-60s
SNAP has the ability to ton it in 2020 by hitting on all cylinders:
- Ad pricing will rocket upwards, as SNAP has been widely reported to have the most attractive ROIs in the industry (prices too low). Since Snapchat is all mobile, it will benefit from localism in advertising, a massive tailwind as far as the eye can see. Is your local jui-jitsu gym advertising on Snapchat yet?
- Users are growing quite nicely in all geographies, even North America which is saturated for SNAP at the teen-to-20s demographic. India has been quite additive, and SNAP will continue to add users around the world thanks to it's fantastic product. User growth is the best form of traffic there is.
- Ad load will turn from a set of brakes into a potential accelerator, even with mgt holding back to keep the product spiffy.
- New platforms. Games, TV, BitMojis, Lens Studio and SnapKit have turned into huge platforms, yet are still just kernels of what they can be. As Snapchat grows these platforms, it harnesses the power of friendships and the social graphy to make users lives more efficient, but also enrich revenues at the same time-- an ideal symbiotic relationship between company and user not unlike that of Apple.
As Wall Street opens up its eyes, Snap will turn in strong quarter after strong quarter in 2020 to build investor's confidence, and Snap will shift from mistunderstood to darling. Since Snap has been a coiled spring for almost 3 years now, this should result in an "underdamped" effect on the stock price, which will rise right thru all-time highs of $29 and rip thru the $30s into a $40 handle. There's legs all the way to $60s by roughly Xmas 2020 and 1st half 2021.
LONG TERM: BEYOND 2021
Investor should, this late in the up-cycle, begin shifting their investments to ONLY those companies which can grow thru recession thanks to having huge economic advantages on competitors. Remember 2007-2011 downturn? Cable TV was $100-200 per month while Netflix ( $NFLX) was $8 per month-- easy decision for consumers who might've lost their job or were worried about the economy. Same went for Google's advertising ROIs, companies cut their ad budgets with traditional providers at the time (TV, billboards, radio, etc..) but didn't touch the "golden goose" of search advertising. This is what Snap's ROIs look like today. Industry best. Plus, SNAP is such a small percentage of overall ad budgets, that advertisers could still CUT overall ad budgets yet allocate more to Snapchat. This is ideal situation for a stock after a 9-11 year up-cyle run.
SNAP should be 20-25% of your equity long portfolio in 2020, especially if you can acquire the shares on sale at $16-17 after Wall Street wrongly dinged the company for it's revenues (just above top of co. estimated range). Wall Street has been obtuse when it comes to SNAP since the IPO, and the Q4 results reaction was no different. Strong users, even stronger platforms, and excellent ROIs for advertisers was not rewarded. Expect SNAP to rise into the mid $20s in the next 3 months. You simply cannot find a better equity to own than SNAP, thus we give it our highest recommendation for position size (while some individuals might be able to swing > 25% positions, we write for a professional investor class such as hedge funds).
There IS one better investment than SNAP, but it's not equity, it's a commodity.
It's called BitCoin.
BUT, you must pick the PROPER protocol. Here is the first step you will need to achieve understanding of the newest and perhaps greatest commodity class of the 2000s...
This primer was published on CoinGeek this year, but it is our THIRD mention of this investment as industry-best since first alluding to it in April 2019 at $50-60 price. If you read the Medium pieces...
...you can see inside our re-iterate strong-buy on SNAP in early 2019 (at a price which would've returned you 100% in < 1 year) that there's mention of another BETTER investment. It was BSV, and all you had to do was follow the Twitter account @EquityDiamonds and you would've easily known the implied best-pick.
We mentioned it again as the ideal timing to buy BSV as recent as December, and we were spot on as it rose from $80-90 trading range to $300-400 trading range in 2020. It's the best performing legitimate long-term investment pick in 2020-- but also for beyond that. In the mid $300s it's STILL a good investment.
"Craig S Wright (whom America SHOULD adopt from Australia but won’t) who is in the future going to possibly change everything with his unique home-grown version of Proof-of-Work Max-Theoretical-Efficiency Node Networks which apparently (given what’s printed about him in the “funny papers”) almost nobody understands at the moment (more on this topic later article)"-- @EquityDiamonds on https://medium.com/@EquityDiamonds/introducing-diamonds-in-the-roughage-how-50-000-investments-can-change-the-rest-of-your-life-ec2460f8bc61
Disclosure: I am/we are long AAPL, BSV-USD.