🍪 Is Snap back?

Happy Thursday, friends. This is Bite Sized Beta. We’re the Special K to your milk bowl - we bring the crunch to your tech news breakfast.

We’ll even throw in some extra dried strawberries.

Let’s get to the good stuff.

In the oven this week:

• 👻 Is Snap making a comeback?

• 🗳️ Poll of the week

• 🍪 Cookie crumbs: 5 bite-sized headlines

• 💬 Tweet of the week

• 🍫 Chocolate chips: our 3 favorite finds this week

• 😂 Snickerdoodles: memes for the weekend

FRESHLY BAKED

IS SNAP BACK?

It’s spooky season, and Tech Twitter has been buzzing about a familiar ghost.

No dawg – not Casper the Friendly Ghost.

More like this one:

Snap is like that one kid you used to be best friends with, but drifted away from after middle school.

A few years later, you start hearing … wait what’s that?

They might be kinda cool again now...???

Before ya catch secondhand regret, let me explain.

It was a big earnings week for Big Tech.

Microsoft, Meta, Google, and Snap all reported their Q3 performance.

And as it turns out, Snap crushed expectations.

Revenue went up 5% in the last quarter after 2 quarters of declines, and daily active users grew to 406 million.

That’s a ton of users. (For reference, Twitter has about 230 million daily active users.)

Their stock jumped 11% after the announcement, which led Mark Pincus (Founder/CEO of Zynga) to tweet:

If you don’t know, Mark is one of those legendary founders who’s still pretty well respected in the VC/tech world.

So him saying Snap is undervalued got our ears perked up like a kid on Christmas morning.

Fueling the hubbub, Snap announced that it’s buying back up to $500M in stock (usually a sign that management thinks the stock is undervalued).

And of course, a bunch of other investors chimed in to agree with Mark.

But what does our guru Warren Buffet say?

When in Rome, do as the Romans do.

So we had 5 cans of soda and a Big Mac, thought more about it, and now we’re a little skeptical. Here’s why:

1. Snap’s still unprofitable, and that doesn’t seem to be changing anytime soon. In all their years as a public company, they’ve never really turned a profit, besides one quarter in 2021 where they pretty much just broke even.
   

2. Compared to Meta, which might still be one of their biggest competitors, Snap’s growing much more slowly (Snap grew revenue 5% since last year, while Meta grew 23% - and keep in mind Meta is enormous, which makes this even more impressive).
   

3. Their product strategy is all over the place: they’ve got glasses, an AR developer platform, heat maps showing where your friends are.. oh, and remember their flying drone? It’s like an episode of Hoarders out here. Where’s Marie Kondo??
   

4. Advertising is still one of their main sources of revenue, but Snap lacks structured data about their users’ interests - this is why FB and Google ads dominate.
   

5. They’re buying back their stock with cash from debt. Simple math: if they borrowed money with a 5% interest rate to buy back their stock, they’ve gotta grow a lot more than 5% to make it worth the buy. Kinda risky?

And hey, this doesn’t mean they can’t still do well, it just doesn’t scream undervalued in our eyes.

Oh, one last thing - and repeat after me: this is NOT financial advice, folks!

FROM THE COOKIE JAR

POLL OF THE WEEK: DO YOU THINK SNAP IS MAKING A COMEBACK?

We gotta know what the cool kids think - is Snap is making a comeback? Let us know if we need to reinstall it.

THE BIG PIZOOKIE

TWEET OF THE WEEK

Also why being rude to service people is such a red flag.

COOKIE CRUMBS

BITE SIZED HEADLINES

CHOCOLATE CHIPS

OUR FAVORITE FINDS

• Lessons learned from spending 10K hours with Reid Hoffman. Love this one: “Reason is the steering wheel. Emotion is the gas pedal.”

• 12 AI prompts to help you market anything

• Steve Jobs’ advice for micromanagers

SNICKERDOODLES

THURSDAY MEMES

 😂 

What'd you think about this email?

• 🍪🍪🍪 Top notch!

• 🍪🍪 Meh... could use more milk

• 🍪 Undercooked, do better