SNAP just reported earnings and plunged after hours after missing everything. It burned through $288 million in cash. The more it spends, the more it loses. An operational Ponzi scheme of sorts.
The SNAP IPO was led by Morgan Stanley, Goldman Sachs, JP Morgan, Deutsche Bank, Barclays, Credit Suisse and Allen & Company. All the usual criminal cartel banks aside from Allen & Company. Allen & Company is a financial “advisor” – i.e. sleazy stock broker – driven firm based in Florida. I don’t know how Allen & Co. was put on as an underwriting manager other than it’s likely that one of SNAP’s co-founders is buddies with one of the owners at Allen & Co.
Speaking of SNAP’s two co-founders, each sold $272 million worth of stock into the IPO. It would be impossible to know if they sold knowing that anyone who bought the IPO, or has bought share since the IPO, is going to end up holding an empty bag. But I provided an in-depth analysis of SNAP to subscribers of the Short Seller’s Journal in which I concluded that SNAP would eventually go below $2.
I have to believe that the Einsteins at Morgan Stanley, Goldman et al had to know this. That being the case, I don’t know how the public issuance of SNAP shares is not fraud. The venture capital and private equity funds who invested in the early rounds were given an out by the public – a public that was lied to about SNAP’s future prospects.
As I finish this, SNAP is now below $12/share ($11.85). It’s still a great short here. If I have time to pour through the numbers, I’ll be updating the subscribers of the Short Seller’s Journal and lay out a course of action to short the stock from here. You can learn more about this newsletter here: Short Seller’s Journal information. There’s no minimum subscription period and subscribers get a 50% discount on the Mining Stock Journal.