back to article Snap: We've blown $3bn this year and Tencent wants to give us more

Nose-diving social media company Snap Inc. says it has secured a significant investment from Chinese tech powerhouse Tencent. The photo sharing company slipped the disclosure into yesterday's remarkably poor quarterly earnings report, saying the 145 million shares were a non-voting stake and would not be subject to much …

Anonymous Coward

If they want it to be profitable they could always fall back on BaaS (Blackmail as a service)

3
0
Silver badge

Or maybe just charge people a small (tiny even) subscription fee. Except that wouldn't make the VCs the megabux they're looking for I suppose.

0
0

I am sure they get enough through advertisements, although with Facebook eating into their share of the market they probably cannot charge as much for custom made filters that can potentially reach thousands.

0
0
Silver badge

Government's pal links up with Government target

One is US one is PRC. Which is which?

Answers on a postcard (for security reasons) to [address withheld for privacy reasons}

2
0

I don't see how "acquired 145,778,246 shares of our non-voting Class A common stock via open market purchases" leads to "help fund a revamp of its Snapchat service to be easier to use". Open market purchase implies they bought from people who are NOT Snap, and thus Snap received no money with which to revamp anything. Have I missed something?

11
0
Silver badge

I was confused by that, as well. The only way I can reconcile it is that Tencent purchased a bunch of shares on the open market which were previously held directly by Snap.

3
1
Silver badge

If they were on the open market then they weren't from Snap. That kind of sale would have to have been accounted for in the balance. Just goes to show how poorly most people understand the stock market.

Looks much more like TenCent is taking advantage of Snap's weak shareprice to move capital to the US. An inversion at some point is possible.

0
0

This doesn't really make much sense. If the Tencent purchases were made on the open market and Snap was not aware of them until notified, then in all likelihood the money went to existing holders of the stock. That wouldn't fund anything at Snap; only if new shares were issued would there be new money coming into the company's coffers. Reading the 10-Q, they for no obvious reason refuse to provide information on cash from financing activities for the previous quarter, only (uselessly) for the previous 9 months, but there's nothing here to suggest that new A shares were issued to Tencent for consideration. I doubt very much that this stock purchase helps Snap in any way.

1
0
Silver badge

And this is exactly why capital gains on stocks purchased on the secondary market should be fully taxable as income. You are not helping a company grow by buying shares unless you've bought them directly from the company.

But if you invest in a company pre-IPO, then you should get some tax advantage for helping a company when the risks were higher and when your investment actually goes to the company.

3
0

Re: What about auto-updates?

You are not helping a company grow by buying shares unless you've bought them directly from the company.

Not necessarily, a higher listed share price could allow a company to secure additional funding such as debt.

This could be what Snap Inc means.

0
0
Anonymous Coward

Snap or Bitcoin....

Reality-distortion-field central... Welcome to the dystopian future today

0
0

Business Plan

1) get lots of users

2) lose loads of money (the more the better)

3) IPO

4) retire

2
0
FAIL

The company works just like their app...

For the calendar year, Snap told investors it has racked up a staggering $3.1bn in losses

So just like their app, the money comes in and vanishes sometime later with nothing to show for it in the end.

I'd also like to point out that four years ago, almost to the day, Snap turned down both a $3billion offer from Facebook and a $4billion offer from Tencent to buy them. (https://www.theregister.co.uk/2013/11/13/snapchat_laughs_off_facebook_buyout_offer/)

1
0
Silver badge

Re: The company works just like their app...

The IPO gave investors a much bigger payoff than previous offers.

With anything "webscale" nowadays only an offer > $ 10 bn seems to get VCs interest. You could have an app that counts farts (or something even less interesting) and as long as you have enough users (> 200 million seems about the threshold) then investors will be desperate to hand over somebody else's pension pot to get a bit of the action.

0
0

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Forums

Biting the hand that feeds IT © 1998–2018