Snap Chat and Dutch Tulips

[Night Hides Not]

Based on the following article in cnbc.com:

http://www.cnbc.com/2017/03/02/morgan-stanley-and-goldman-sachs-should-hang-heads-in-shame-over-snap-ipo.html

Title:  Morgan Stanley and Goldman Sachs should ‘hang heads in shame’ over Snap IPO: Analyst

Here are the paragraphs that caught my eye:

The holding company, which owns social media phenomenon Snapchat, will debut on the New York Stock Exchange Thursday but investors have bought shares with no voting power.

Stephen Isaacs, chairman of the investment committee at Alvine Capital, says the major investment banks behind Snap's public debut are pushing through an unusual move that takes liberties with investors' rights.

On trailing numbers, investors are being asked to buy Snap Inc at a price over revenue multiple of around 60.

From a quick headline search, Snapchat's revenue for 2016 was $400 million, give or take. Forecasted revenue for 2017 is expected to top $1 billion, the IPO is valued at $24 billion.

Wiki has a good synopsis of the Dutch Tulip Bulb "bubble": https://en.wikipedia.org/wiki/Tulip_mania

By 1636 tulips were traded on the exchanges of numerous Dutch towns and cities. This encouraged trading in tulips by all members of society; Mackay recounted people selling or trading their other possessions in order to speculate in the tulip market, such as an offer of 12 acres (49,000 m2) of land for one of two existing Semper Augustus bulbs, or a single bulb of the Viceroy that was purchased for a basket of goods (shown in table) worth 2,500 florins.[33]

I just added a new book to my reading list: 

Extraordinary Popular Delusions and the Madness of Crowds, published in 1841 by the Scottish journalist Charles Mackay

[Sanguine]

Yes, the tulip bubble is a good example.  Llamas, emus and Brangus are smaller examples and closer to home for me.  Their value was mostly in that they were valued. 

[mountaineer]

Just saw this on Twitter:

Charles Gasparino‏Verified account @CGasparino 5m5 minutes ago

after @kubsv sells u a variable annuity he will sell you shares of $SNAP at $25 just before it falls back to $17 and he will wear this hat !

Gasparino posted a photo of someone in a Trump cap.

All I know about Snapchat is that my niece uses it to post things and make nasty comments she shouldn't, but she knows her mother can't see them.   

[Night Hides Not]

Yes, the tulip bubble is a good example.  Llamas, emus and Brangus are smaller examples and closer to home for me.  Their value was mostly in that they were valued.

Just ordered that book I referenced, should have it in a week or so. Will I have the time to read it? That's another question...my son was just elected Senior Patrol Leader for his scout troop. I was never in scouts, so I printed out the responsibilities. I warned him he will have no life during the next six months, and I'm going to be on him.

He's going to be hearing a lot of my platoon leader stories to augment the leadership training I'll be providing him.

[Sanguine]

Just ordered that book I referenced, should have it in a week or so. Will I have the time to read it? That's another question...my son was just elected Senior Patrol Leader for his scout troop. I was never in scouts, so I printed out the responsibilities. I warned him he will have no life during the next six months, and I'm going to be on him.

He's going to be hearing a lot of my platoon leader stories to augment the leadership training I'll be providing him.

It sounds pretty interesting.

[Night Hides Not]

It sounds pretty interesting.

It should offer a different perspective, as it was written nearly 180 years ago.

[jmyrlefuller]

Just saw this on Twitter:Gasparino posted a photo of someone in a Trump cap.

All I know about Snapchat is that my niece uses it to post things and make nasty comments she shouldn't, but she knows her mother can't see them.   

That, and people in their 20s and early 30s (not me, thank God) like to use it to take pictures of themselves that make them look like dorks.

[Oceander]

Meh.  Publicly traded New York Times stock has very small voting rights compared to the non-traded stock held by the family, which has super voting rights.

As long as the facts were disclosed properly, the investors know what they're getting into.  Tulip bulb syndrome can happen with any stock, the mere fact that this stock has no voting rights doesn't make it particularly susceptible to tulip bulb syndrome.

[Night Hides Not]

Meh.  Publicly traded New York Times stock has very small voting rights compared to the non-traded stock held by the family, which has super voting rights.

As long as the facts were disclosed properly, the investors know what they're getting into.  Tulip bulb syndrome can happen with any stock, the mere fact that this stock has no voting rights doesn't make it particularly susceptible to tulip bulb syndrome.

We aren't talking about "investors" here, we're talking casino style gambling. Pure speculation, considering the stock is now trading at 25-30 times projected revenue. Their net loss last year was over $500 million. Those kids are making Ponzi and PT Barnum look like pikers.

Those that bought on Friday are down about 25% today.