Rest in peace Snapchat?
Snap's stock has plummeted over 90% in five years, and the company has invested an estimated $3.5 billion—over half its annual revenue—into developing Snap Spectacles, a heavily criticized wearable device. The speaker argues this massive bet on an unpopular product may be the final blow for the struggling company.
Summary
The transcript discusses Snap Inc.'s severe financial and strategic difficulties. The company's stock performance has been disastrous, falling more than 90% over a five-year period. Most significantly, Snap has made an enormous financial commitment to Snap Spectacles, a wearable augmented reality device that has been poorly received by the market and critics. The Spectacles are criticized for multiple design flaws: they are five times heavier than regular glasses, weigh approximately as much as a baseball, and are described as potentially the ugliest wearable ever created. The financial investment in this product is staggering—$3.5 billion spent on development, which represents more than half of Snap's annual revenue. Given the company's already troubled trajectory, the speaker characterizes this massive bet on a problematic product as potentially catastrophic, referring to it as 'the nail in the coffin' for the company's future prospects.
About this episode
Is this the end for Snapchat stock? Prof G Markets breaks down the news that’s moving the capital markets, helping you build financial literacy and security with Scott Galloway and Ed Elson.
Key Insights
- Snap has invested an estimated $3.5 billion in developing Snap Spectacles, which equals more than half of the company's annual revenue
- Snap's stock has fallen more than 90% in the past five years, indicating severe long-term performance decline
- The Snap Spectacles are criticized as potentially the ugliest wearable in history, weighing five times heavier than regular glasses and as heavy as a baseball
Topics
Transcript
[0:00] Snap has literally bet the farm on this thing. A few words of remembrance for Snap. The stock has fallen more than 90% in the past 5 years and to add insult to injury, they have now come out with what might be the ugliest wearable in history. In addition to weighing five times heavier than a regular pair of glasses and about as heavy as a baseball, the Snap Spectacles were also incredibly expensive to build. The company dished out an estimated 3 and 1/2 billion dollars creating this [0:31] product, which is equal to more than half of the company's annual revenue. In other words, Snap has literally bet the farm on this thing. Snap has been…
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