"We need to cash out before investors realize we have little value."
It'll matter later, when the correction Spiegel is predicting finally arrives.
That's when Snapchat goes from being worth $18 billion in the public market, to being worth $4 billion. This story repeats over, and over, and over, and over again; and every time, half of people are off by years in predicting an imminent correction, and the other half don't think a correction will ever come (or that we're just at the beginning etc).
They fucked up big time.
The value of a company pre-IPO is what someone (or relatively few people) is willing to pay to acquire you. The value of a company post-IPO is essentially how much your shares are selling for. The prices of your shares are largely dictated by the opinion of a much larger number of people.
Can't succeed if you don't try. Good for the founders for deciding to run with it.
Having said that, I agree. It was likely a huge mistake to turn that down. FB has whats app, and there is now so much competition in this space its uncanny. From iMessages, to FB Messenger, to Whats App, and smaller players like Kik, it seems like a congested market.
That's what people said about Facebook in 2006 when they turned down the Yahoo offer. I predict Snapchat is going to be a dominant player in mobile advertising, like Facebook and Google. I wish I could invest in it now, even at this high valuation. Also extremely bullish on Tinder and Pinterest.
That's called balls.