Disclaimer: this is a parody.
As it prepares for its initial public offering, happening as early as March 2017, Snapchat made many of its financial details public for the first time on Thursday, February 2. Snapchat aims to raise about $3-4 billion at a $20-25 billion valuation. That’s a pretty optimistic valuation considering that Snapchat generated $404.5 million in sales but lost $514.6 million. If my math is right, that means that Snapchat spent almost a billion dollars last year on cost of revenue, overhead, and other expenses, almost double what they spent in 2015 (although they did increase sales by about $350 million). It might be the 3.4 employees/day they added to their payroll in 2016, I can’t be sure.
TL;DR, I know, I get a little bit of a chub when diving into the numbers. The point is, a company that spent almost a billion dollars and had a net loss of over half a billion dollars is trying to value itself at $20-25 billion. To give you a comparison, that’s about twice the current market capitalization of Twitter, which has had similar net income numbers but on much higher revenue. That said, it’s a good time to check in on the Snapchat offices and see how things are going with Snapchat CEO.
CEO: Hey, Tammy. Any phone calls for me today?
Tammy: Well, someone left a voicemail last night of them laughing hysterically. I looked up the number. It was Mark Zuckerberg. And then…
CEO: *Interrupting Tammy* Mother. Fuck. Zuck. Did you know he snapped me his balls last night and called me a “queer”?
Tammy: Yes sir, actually. He called again this morning to ask you how you liked them then bragged about Facebook being worth twenty times what we are because his company actually MAKES money.
CEO: Joke’s on him. I’m calling up that nerdy cuck’s wife tonight.
CEO: Hey Ralph.
Ralph: Hello, sir.
*Both stand in uncomfortable silence*
CEO: So, um, good work on those financial disclosures. Although I wish we could have fudged the numbers a little so we wouldn’t look like complete assholes.
Ralph: Well sir, $400 million in revenue looks pretty good to investors. And I think I know how we can cut down on some costs so we’re not hemorrhaging a billion dollars per year.
CEO: No, Ralph, that’s not your job. You’re a fucking boring accountant. Just, I don’t know, make my numbers look good so I can get my payday when the lockup period is over.
CEO: Jim, good work on sales, buddy. Growth looks great.
Jim: Hey, thanks, boss. I’m doing my best here. I mean, selling $400 million in ads isn’t that hard when you have 120 million active users, right?
CEO: Sure, whatever. Just tell me how it cost us a billion fucking dollars to generate only $400 million in sales.
CEO: I’m just fucking with you, I don’t actually care. Once we sell our shares I don’t care if someone burns this place to the ground. Now just try to look busy and make my numbers look good. I don’t care who you have to go down on.
CEO: Bob! How are things going?
Bob: Not bad, sir. I just released a new performance update for the app.
CEO: Good, we need to maintain the app for at least another year. Keep the money men happy.
Bob: Yes sir.
CEO: How’s traffic looking today?
Bob: The usual. Dick pics and selfies. And for some reason Mark Zuckerberg’s balls. Do you know anything about that?
CEO: Huh? No, no. Anyways, keep releasing updates so people think we care.
Bob: Yes sir.
CEO: FRAN! Why the hell are our costs so high?!
Fran: You always tell me I don’t have a budget, sir.
CEO: FRAN! DON’T TALK BACK TO ME. HOW DID YOU NOT THINK ABOUT OUR FINANCIAL DISCLOSURE?
Fran: I’m sorry, sir. I thought growing user numbers was a priority.
CEO: Oh. Yeah. You’re right. Sorry, Fran, I lost my head. Big money on the line. Get up those user numbers and before you ask, no, you still don’t have a budget.
CEO: Hi Steve, how are your projects going?
Steve: Well I’ve come up with a way to make Discover more seamless so more people click on the ads. I’ve also offered ad options above Snapchat stories.
CEO: Good. Now you’re thinking. And remember that I came up with Discovery and THAT is what is going to get us to a billion in revenue, even if it costs us $5 billion.
Steve: Forgive me sir, but doesn’t a billion in ad revenue seem optimistic when we only had $400 million in revenue last year with almost as many users as we have today?
CEO: Steve, if you want to keep your job you’ll shut up. I’m the $25 billion man, remember? Just spruce up Discovery and we will be golden. Literally golden. How are the new filters coming along?
Steve: The only one I have finished is Ollie the Bobcat. It’s going to be a bigger hit than slutty puppy. Next is the Milo Yiannopoulos post-riot black eye filter. I nailed the hair.
CEO: Wow, I’m so bored. Just get it done. Now if you’ll excuse me, I’m going to go cash my multi-million dollar paycheck. .