With shares of Snap Inc. — the parent company of Snapchat, the disappearing messaging app — crashing more than 21 percent on Thursday after reporting less-than-stellar Q1 financials, investors are clearly concerned about the company’s long-term viability. But have the rumors of Snap’s death been greatly exaggerated?
Not exactly, according to Eric Schiffer, a tech investor and CEO of the Los Angeles-based private-equity firm The Patriarch Organization.
The key takeaway from the Snap earnings call, Schiffer told TheWrap, was its “primal scream of impending doom.” He argued that Snap executives “knew going in they were pulling a giant scam on the public, because they knew that things were slowing down and that Facebook — via Instagram — had stolen their core competitive advantage.”
In case his point wasn’t clear, Schiffer reiterated Snapchat’s core functions, like Stories and Geofilters, were “fleeced at midnight” by Instagram. He said it’s only a matter of time before Snap is “buried alive.”
Such pointed comments would give the impression Schiffer has a direct stake in Snap’s future, but he said he does not hold a long or short position in the company.
And despite posting more than $2 billion in loses for Q1 and lackluster user growth, not everyone is writing off Snap. “Snap has lots of potential,” said Duncan Davidson, general partner with Bullpen Capital, an early stage venture capital firm.
Davidson likened the Mark Zuckerberg-Evan Spiegel rivalry to that of Bill Gates and Steve Jobs 30 years ago, “where a brilliant business leader with a great technical team went after a brilliant product person, and won.”
Still, Davidson sees a brighter outlook for Snap than the pains Apple went through prior to its revitalization in the early ‘oos, because the company is “much stronger” in the millennial market than its main competitor.