Shares of Snap (SNAP) are down -50% since the social media company's IPO in March. The stock is getting hammered today (down -11%) after missing Wall Street analyst expectations, reporting even steeper losses and fewer daily active users than analysts predicted.
Hedgeye's Internet & Media Sector Head Hesham Shaaban hosted a deep dive institutional call to add SNAP to his Best Ideas List as a SHORT on Friday June 16. Since then shares are down almost -30%.
Here's what Shaaban wrote in that call invite...
The Team will discuss both the near-term and long-term outlook of SNAP. The discussion will also run through the various headwinds that we expect to hinder SNAP's DAU and revenue growth prospects, and discuss how we expect the story to play out over the course of the year and into 2018.
KEY DISCUSSION POINTS:
And here's some more intel from Shaaban in a more recent note:
"Regarding Snap’s (SNAP) longer-term prospects, we estimate that the company has already captured the lion's share of the low-hanging fruit in terms of NA/EU DAUs, and there are structural headwinds (both internal & external) to broader adoption, especially on a daily basis. That also means it's longer term revenue prospects are in question since the highly-touted monetization delta b/w SNAP and FB isn't nearly as wide as the ARPU metrics suggest."