NBCUniversal Sold $500M Stake in Snapchat | Hacker News Reader

NBCUniversal Sold $500M Stake in Snapchat

hollywoodreporter.com

88 pointsavonmach44 comments

> Three years ago this month, as Snap Inc. went public, NBCUniversal announced that it had invested $500 million in the company.

Not sure why you would invest in Snap at their IPO price at $17, given that they had no prospect of profitability or any signal of growth due to Instagram's aggressive copying strategy at the time.

Compared to three years ago, $10 is a bargin, but no better than the $5 price in early 2019. Better wait for it to enter single digits.

Of course if they had known it would have fallen to $5, they would have waited. Anyone would have. But nobody has the fortune to invest with 20/20 hindsight

They gambled on a profit-less company IPO and lost. I'd say there was some hindsight.

I'd like to see how many tech companies are showing a profit when they IPO.

ALso, 500M is a lot of money but it's not THAT much money when you're running a multi-billion dollar company and responsible for delivering billions in revenue. To get those numbers you have to invest in things. NBC isn't sitting around wondering if they can eek out another million dollars of ad buys for the TODAY show this quarter.

I think the major tech companies aka Apple, Google, Microsoft, or even Facebook and Oracle etc where all profitable at IPO. You might get a lot of unprofitable tech IPO’s, but they are less likely to last and thus grow.

Great. I assume you shorted them at IPO and reaped a fortune. Otherwise, my point stands :)

There’s a huge difference between having the foresight to say this is risky and predicting it will crash to $5 in 372 days. One is prudent investing the other is gambling.

There is NO DIFFERENCE between investing and gambling.

I totally agree. Maybe there are different degrees of gambling ie informed vs blind, but it is all gambling. Unless you are talking about fixed income.

NBC could just give me 500M and I could probably just do a lazy-three portfolio and out perform anything else they're considering.

What is a lazy-three portfolio?

https://www.bogleheads.org/wiki/Lazy_portfolios

wow TIL, thanks.

I would think it was part of the deal. They are probably backing away as comcast offers its own streaming service

I also think NBC/Universal’s investment in quibi may have something to do with this.

There is some overlap between it and Snapchat for short-form media.

Hindsight bias is 20/20

If they had perfect knowledge of the future...

>Not sure why you would invest in Snap at their IPO price at $17, given that they had no prospect of profitability

That's typical of social media companies - get users first, and figure out the money later. And it makes sense. If you have a billion active users on your platform, you can always find ways to make money.

>due to Instagram's aggressive copying strategy at the time.

Everyone copies everyone in this space and always has.

I wonder how much they regret not selling to FB

Not sure I understand.

The IPO of Snap raised $3.4 billion w a valuation of $24 billion.

Evan Spiegel has (maybe not this month) a net worth of over $2 billion.

Zuck was offering $3 billion.

In 2014 FB stock was $20/share. Now its closer to $200/share, so a $3B offer in 2014 roughly translates to a $30B valuation today. From the financial side it appears that Snap made the wrong choice.

Without contradicting your general point, Spiegel’s bet worth is so illiquid (so solid? :) ) that I’m not sure what it really would be if he wanted to get cash out

I'd guess that a lot of the offer was in SO. so also illiquid. Though FB stock is worth way more than Snap stock so he probably made the wrong choice, but who knows.

FB is less illiquid than SNAP for Evan. If he sells 50% of his SNAP shares, people will get concerned about his investment in the business. A mid-level exec (or even high profile acquisition) selling a bunch of FB stock doesn’t affect the price much.

But he probably likes running the company more than he’d like the extra money.

That is the key, he still had cash and control of a platform.

Very different situation for Jack Dorsey w/ Twitter.

Probably very little considering every founder that sold to FB seems to have left after butting heads with Zuck.

Lots o people be liquidating assets right now...

Maybe they're little late to the party

Who was silly enough to buy it??

Liquidity problems?

I never understand the "Quietly" part in headlines like this. The fact that it's headline news is kind of self-refuting, and even without that, where do people usually shout about the positions that they're selling?

It's part of the headline newsspeak bingo game. My personnal dislike is to "this SLAMS that". It's one of the many many reason why news sites lose value and identity, everything is instant, everything is a big news, everything is written in a way that shocks to get clics and views, and the actual information comes second place.

Slams is way too common. It's very hard to read the news without seeing "slams" somewhere.

And other violent primal words like ‘rips’ and ‘lashes out’ are often employed too. It’s no wonder it feels like living in a digital jungle.

My favorite is the question headlines.

Is Mexico in talks with the US about drug cartels?

Are you chicken nuggets covered in covid-19?

Is Trump ritualistically sacrificing children in the oval office?

They're leaving it up in the air, so you can't call them on writing garbage they barely try to back up.

If the headline is a question, the answer is always no.

That's a good rule of thumb

Betteridge's law of headlines

https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline...

This is both a financial ("will this investment make money?") and a signaling ("what does (not)owning Snap say about us?") decision.

They say "quietly" because NBCU didn't publicize this at all, suggesting that they liked the signal of buying Snap, but no longer like the financial investment.

You could compare this to Sequoia walking away Finix two days ago[1], where Sequoia wanted to be very loud and squash the financial signal by letting Finix keep the money.

[1] https://news.ycombinator.com/item?id=22527943

Whipsers from around corner Pssst, hey kid... Wanna buy $500M of Snapchat stock?

It is quite a large sum of money and if there has been no official statement from the company which did the offloading, then it is said to be quietly.

Except $500M barely register for a company the size of NBCUniversal; it is not "quite a large sum of money" for them at all. Their yearly revenue are above 30 Billions.

> Except $500M barely register for a company the size of NBCUniversal

Since it was in Comcast's quarterly report, it was large enough to "register".

> I never understand the "Quietly" part in headlines like this. The fact that it's headline news is kind of self-refuting

It was in Comcast's quarterly report filed on January 31st, but even then it would need to be compared to the prior quarterly report 3 months earlier. So nobody - with write access to any website - noticed until March 9th.

> and even without that, where do people usually shout about the positions that they're selling?

Form 3 Form 4 Form 13F

Anyway, NBC was not within reporting thresholds for Snapchat.

The quietly part makes it sound more scandalous or suggestive, which drives clicks to an otherwise boring story.

The only time I see people shout about positions they're selling, is when they absolutely have to unload in a hurry, so they go max wide on the potential buyer attention campaign. Magic Leap's recent public humiliation / desperation, is an example of this in action.

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