Snap is bringing in significant revenue and they will book over $1B in revenue, the challenge is that revenue growth has slowed significantly. That coupled with high operating costs and headcount expenses leaves them very much in the red. And it's debatable how many quarters this can continue without restructuring or another capital infusion.

They have been able to increase revenue per user but still trail Facebook and the growth story pitched at IPO around user growth is the biggest challenge.

With the platform stalling in user numbers increasing revenue per user is only one side of the equation.

The more damning item is really what they knew during the roadshow and how they disclosed it. Obviously Instagram stories has had a material impact on their business and the "whistleblower" was bringing this to management's attention while being shutdown most likely to not derail the momentum of the IPO.

It is quite possible that this may result in fines because there will most likely be a paper trail internally that detailed these issues. Then it's up to a judge to decide if enough disclosure was done.

That's the DOJ/SEC issue as for the ten year plan that's even trickier. Anecdotally Instagram delivers more value to advertisers with actual intent and purchases whole snap is more of an awareness play. But as we've seen with MySpace and Digg even high flying priorities can fizzle out as quickly as they give traction.

In each case a competitor really takes the lions share of the users and it's obvious that in snaps case that is Instagram. And buying a stalled out social platform is a bad play for any company that's serious about building the future.

Given the voting structure I think this will be playing out for a couple of years but at the moment the prospects certainly don't look good and the stock price reflects as much.