Analyst Estimates:

• Adjusted EPS: Loss of 14 cents per share expected by a Thomson Reuters consensus estimate
• Revenue: $186.2 million expected by a Thomson Reuters consensus estimate
• Daily active users (DAUs): 174.61 million expected by a FactSet estimate
• Average revenue per user (ARPU): $1.07 per user expected by FactSet

Billionaire Soros a holdout while hedge funds dump Snap shares one quarter after buying them

Aug. 14, 2017

• David Tepper's Appaloosa Management dissolved its 100,000-share stake in Snap in the second quarter, according to a filing Monday.
• Separate filings showed Third Point, Moore Capital and Jana Partners sold their stakes in the Snapchat parent.
• Billionaire George Soros remained an investor in the stock in the second quarter.

Most of the big hedge funds that bought Snap shares in the first quarter sold them just one quarter later, leaving billionaire George Soros as the only major investor still owning shares in the social media company.

David Tepper's Appaloosa Management dissolved its 100,000-share stake in Snap in the second quarter, according to a regulatory filing Monday with the U.S. Securities and Exchange Commission.

Moore Capital and Jana Partners also sold out of their Snap positions, according to separate filings.






On Friday, a filing showed that Dan Loeb's Third Point dissolved its 2.25 million-share stake in Snap in the second quarter.

George Soros only decreased his position in Snap by 100,000 shares, keeping a stake of 1.55 million shares valued at $27.5 million at the end of June.

Shares of the Snapchat parent got a temporary boost in the second quarter after filings showed the hedge funds had bought the stock in the first quarter when Snap went public. However, the stock has fallen after disappointing earnings reports, and hit a record low Monday before rebounding 6.5 percent to close at $12.60.

Wall Street firm says it was wrong about Snap and slashes 2020 revenue estimate in half — but still no 'sell' rating

Oct. 18, 2017

BTIG analysts halved their estimates for Snap's 2020 revenue and apologized this week for not telling clients to sell Snap shares sooner.

"With the stock down 28 [percent] in the past six months since our initiation at Neutral, we were wrong to not have a SELL rating," the BTIG analysts wrote. "[G]iven a complete lack of comfort with our updated forecasts shown below, we find it hard to be excited by the stock at current levels."

Yet, the analysts still have not lowered their rating to "sell." BTIG maintained a neutral rating on shares of Snap, the parent company of the social app Snapchat.

Here's the logic behind the confusing call: BTIG is impressed with Snap's U.S. growth in daily active users and engagement, in spite of competition from Instagram.

But the company's ability to make money off each user is falling way short of BTIG's forecast. At the beginning of the year, BTIG said it was confident that 2017 revenue would surpass $1 billion — but now it expects $859 million for the year. Given the slower growth rate on monetization, BTIG now expects Snap's 2020 revenue of $4.1 billion, compared to its original forecast of $7.9 billion.

So why not sell the stock? Snap is one of the few investments in digital advertising, besides dominant players Facebook and Google, BTIG said.

"In that light, we remain intrigued by the potential of Snapchat and its 'sticky' user base making it difficult for us to see the stock as a compelling short at these levels," the analysts wrote.

Snap reports Q3 earnings on November 7.

Snap reportedly stuck with ‘hundreds of thousands' of unsold Spectacles

Apparently its drone plans are done for, too

Oct. 23, 2017

Spectacles were one of last winter’s hottest gifts, but apparently demand for them quickly died off and left Snap in a bad position. The Information reports that Snap expected demand for Spectacles to continue after the holidays and ordered “hundreds of thousands” of additional units. But after it opened sales to a wider audience, that didn’t happen, and those units are now reported to be sitting around in warehouses, unsold.

It’s not known exactly how many Spectacles have been sold so far, but from the sound of it, Snap may have dramatically over-ordered units of its debut hardware device. Earlier this month, Snap CEO Evan Spiegel said the company had sold “over 150,000 units,” which sounds pretty bad in the context of having hundreds of thousands sitting around waiting to be sold; although The Information says that figure includes unassembled units with parts that could potentially be used in other products.

Spiegel has tried to paint Spectacles as both relatively successful and merely an early start in hardware. He claims they outsold Apple’s first iPod — a comparison clearly meant to suggest they could eventually have enormous success. But Spiegel also said hardware would really only be important to Snap a decade from now.

“Our view is that hardware is going to be an important vehicle for delivering our customer experience maybe in a decade,” Spiegel said at a conference earlier this month, according to TechCrunch. “But if we believe it’s going to be important in a decade, we don’t want to be starting a decade from now.”

Snap now has a 150-person hardware team, according to The Information, though it isn’t entirely clear what the team is working on. There had been signs Snap was working on a drone, but The Information says that effort has been scrapped. There are also signs that it’s looking into augmented reality glasses, though that’d be a tough effort. It would also put Snap up against tech giants like Microsoft and Facebook, which haven’t had any luck expanding the tech outside of a gaming audience. Earlier this month, Apple said the tech to make good AR glasses “doesn’t exist” yet.

Snap earnings: After Spectacles, Snap still spending millions on research and development

Nov. 3, 2017

Earnings: Analysts model Snap’s adjusted third-quarter losses at 32 cents a share, widening from 8 cents a share in the year-earlier period, according to FactSet. Losses have narrowed after the company’s massive $2.21-a-share write-down in the first quarter, largely due to employees vesting stock options, which continued in the second quarter but to a lesser extent. Estimize, a crowdsourcing platform that gathers estimates from Wall Street analysts as well as buy-side analysts, hedge-fund managers, company executives, academics and others, estimates adjusted losses of 14 cents a share.

Revenue: Wall Street estimates third-quarter sales of $237 million, up from $123 million in the year earlier period. The Estimize consensus also calls for sales of $237 million.

What else to watch for: Snap has been busily acquiring companies to augment its ad sales technology, such as the acquisitions of Placed and Zenley, companies that collect location-based data about consumers. More recently, Snap acquired a company called Metamarkets for $100 million, a privately held tech startup that offers programmatic ad-related services, according to a tech trade press report. If the acquisition occurred in the third quarter, executives will likely discuss it and any other acquisitions on the call with analysts.

Snap executives will also likely discuss Spectacles on the call, the company’s only hardware product. Despite Spiegel’s pronouncement that it has sold more of the gadgets than it expected, there are several media reports of a massive amount of unsold inventory—suggesting Snap may have to address that. Sales of Spectacles, which is included in “other” revenue, also appear to be slowing.

Part of the revenue miss came because Snap wrote down $39.9 million as a result of losses from its Spectacles hardware this quarter. It said the charges were a result of excess inventory and inventory purchase commitment cancellations.