As expected, the Snapchat ($SNAP) honeymoon ended pretty quickly as the day after its IPO it hit its all time high of $29.44 per share and, since then, has gone back down to $21.44, a 27% drop over two trading days. Of course, Snapchat’s CEO couldn’t complain as he made $272 million selling 16 million of his shares on IPO day, not to mention cashing in his multi-million dollar salary and writing off his $890,000 personal security expense from the Snapchat ledger. That’s right, Snapchat, half a billion in the red, spent $890,000 on private security for their CEO and pays him a multi-million dollar salary. Welcome to the Matrix.
Anyway, the joke may still be on him, as the stock continues to plummet and he cannot sell any more shares until after the lockup period. Back in 2013 when Snapchat rejected a $3 billion offer from Facebook and a $4 billion offer from Google, Snapchat CEO and his co-founder still owned over 50% of the company, meaning the Google deal alone would make them billionaires, let alone if they pushed a reasonable counter-offer. Since then, there have been more rounds of funding to keep Snapchat afloat financially, so it’s safe to say Snapchat CEO’s holdings have been heavily diluted since then. Sure, he’s going to walk away from this filthy rich either way, but if the stock keeps going the way it’s going (especially now that short sellers are getting in on the action) Snapchat CEO could have left well over a billion dollars on the table by the time he sells the rest of his shares (if he decides to do so).
That said, let’s take a look in and see how Snapchat CEO is handling his stock’s performance.
CEO: Hey there, Tammy. Hold my calls. I have a million dollars in cash in this briefcase and I’m going to count it in my office for fun. Might find some other uses for it, too.
Tammy: Yes sir, but you already have several calls from inside shareholders who want to know, quote, “what the fuck you plan to do to get people to stop flushing shares down the shitter.”
CEO: *Interrupting Tammy* Yeah, yeah, not now, it hasn’t even traded a week. If they call again tell them to quit their bitching.
Tammy: Kind of odd they all used the same general terminology.
CEO: Tammy, are you listening to me?
Tammy: Yes sir, tell any inside investor who calls to “stop bitching.”
CEO: It’ll be fine. Tons of Millennials are buying our stock. There’s no more enjoyable capital injection than a 24-year-old’s nest egg.
CEO: Hey Ralph.
Ralph: Hello, sir.
CEO: So, is there anything we can do to make our books look better? If you haven’t noticed, the stock is tanking and I don’t want to be selling my shares at penny stock prices when the lockup period ends. How can we put some lipstick on this pig?
Ralph: Well sir, I could probably do something to doctor the books if I REALLY wanted the SEC and the FBI to crawl straight up my ass.
CEO: RALPH! *Pauses and glares at Ralph, then suddenly CEO’s face lights up* Nice! I didn’t know you had it in you, kid.
Ralph: I’m 34 with a wife and kids.
CEO: Whatever, let’s just emphasize adjusted earnings. It’s not like any multi-billionaire investors have slammed non-GAAP accounting lately, right?
CEO: Jim, I saw your email that there might be a problem. Proceed carefully, you know I don’t like problems. This better be important.
Jim: Well, sir, I received a notice today that our ad buyers want an independent audit of our ad metrics.
CEO: What the fuck does that mean?
Jim: Our ad metrics…you know, how long our users watch ads and whether our users can actually see the ads.
CEO: Of course I know that you dorky cuck. What can we do about this?
Jim: Well, Facebook’s on board. So is Google. We’re going to look sketchy if we turn down the audit.
CEO: That hasn’t stopped us before. Our shareholders don’t even have voting rights! *Breaks into hysterical laughter until tears run down his face*
Jim: *Stands silently*
CEO: Just, I don’t know, mark the email as spam, then print it out and burn it. I don’t care. Gonna go count my money now. Later, dude.
CEO: Bob! How are things going?
Bob: Same old, same old. Monitoring the app for bugs and making sure we have enough server space
CEO: Good, we need to maintain the app at least until the lockup period ends. I don’t need the stock to tank any more before I can dump my shares.
Bob: Of course, sir.
CEO: How’s traffic looking today?
Bob: The usual. Millions of dick pics and selfies. Actually saw some boobs for once.
CEO: Boobs? What are you, ten? They’re tits. Say tits.
CEO: Atta boy. Now get back to work.
CEO: FRAN! Why are we getting audited?!
Fran: Audit…like IRS audit?
CEO: FRAN! DON’T TALK BACK TO ME. THEY WANT TO AUDIT OUR ADS.
Fran: Oh, our ad metrics? Jim told me about that. I recommend we do it, we can get more ad partners if they have confidence that our users are seeing ads. We could also custom tailor ads for our users to enhance the experience and grow our user base. Not every user cares about Daily Mail, MTV, and Cosmo.
CEO: Fran. Fran Fran Fran Fran Fran. I don’t want to hear it. We already spend enough money as it is. The last thing I want to do is waste more money on R&D.
CEO: Hey Steve, how’s it hanging? Short, shriveled, and a little to the left?
Steve: Well, I’m under the impression from our numbers that not enough people are looking at ads, so I’ve been thinking about how we could modify the app a little bit so users have to see the ads. Why don’t we make the app open automatically to the Discovery page? Then every user gets to look at that page before using their camera. Right now all the ads are hidden away below Snapchat stories and it takes a lot of work to see them.
CEO: Whoa whoa whoa back up. Where did you see our numbers? I never let you look at our numbers.
Steve: Forgive me sir, but I looked at the public filings. We’re a public company.
CEO: Steve, don’t talk back to me. You’re not allowed to look at our numbers. Ever.
Steve: But sir, I just want us to make more than $4 in revenue per user. I’m trying to help.
CEO: Huh? Sorry, I dozed off a bit. Look Steve, I made it very clear at our last staff meeting.
Steve: The one where you dressed like Prison Mike from “The Office”?
CEO: Yes. Listen. Your job, your only job, is to create new filters. That’s it. Leave the billion dollar ideas to me. Do you have the Trump-Russian hooker golden shower filter ready yet?
Steve: Sir, that reference is kind of old. Could we try something more relevant?
CEO: What, like Harambe? Just do as I say and get me a list of more filter ideas, I need some reading material for the bathroom. .