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Marten Bjork
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Twitter has achieved a "miracle" over the past year by improving the monetization of its platform and achieving GAAP profitability, despite Facebook competition. But MoffettNathanson analyst Michael Nathanson argues that Snap is not Twitter.
Snapchat's parent has been the subject of much attention in recent days, after Cheddar reported on a detailed internal memo that describes:
Break
of the
(SNAP) ambitious profitability targets for 2019. Nathanson wonders if the company's goal is realistic.
"Although
Twitter
(TWTR) performed a similar miracle, we call skeptics because, despite the memo, we do not trust Snap's leadership to navigate these rapids, "he writes.
Snap shares fell 6.4% to $ 7.00, the fifteenth time since September 4, they closed at a new low. Earlier Tuesday, Snap was trading at $ 6.84, a new low intraday.
Snap has seen its balance in cash and marketable securities halved since its initial public offering, and Nathanson expects the company will have to raise new capital in the second half of next year if Snap continues to spend money. Money at the current rate.
"It's obvious that Snap was not prepared for life as a public company, she now has a more pressing problem," he writes. "He is running out of money quickly."
Snap did not answer a Barron request for comment.
For the company to meet the CEO Evan SpiegeAccording to his goals, Snap will accelerate the daily growth of active users in its core markets, deploy a better Android application for emerging markets and significantly reduce costs, according to Nathanson.
He says the company is "trying to do the impossible" in the face of stiff competition from
Facebook
(FB) and his Instagram property. Facebook has been looking for ways to better monetize its feature stories as users flock more and more to the format. Instagram Stories has received positive reviews from advertisers at a recent industry conference, according to a Jefferies report released Monday.
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