Snapchat: 'How To Make $3 Billion-Or Was It $4 Billion-Disappear' (And Other Quotes Of The Week)

The latest rumors swirling around have Google making a $4 Billion rejected offer for Snapchat, after the company's founder, Evan Spiegel, turned down Facebook's reported $3 Billion in cash. Whether this marks the apex of an apocalyptic tech bubble or simply smart business sense on Snapchat's part, only history will know for sure. But the story certainly set off a firestorm of commentary:

"Why did Snapchat turn down Facebook? The short, and perhaps simplistic, answers probably lie with Twitter and teens." –According to the Christian Science Monitor, pointing out the pot of gold standard set by Twitter's IPO for tech company wannabes and Facebook's "decrease in daily users specifically among younger teens," which may lead to an even higher offer down the road. Not that Snapchat is without some impressive numbers, as "users are sharing 350 million photos per day," according to the company.

Forbes hit on a similar theme: "The kids who are losing their passion for Facebook are pretty much exactly the same ones who are flocking to Snapchat by the millions…it likely has around 26 million users…More impressive, 26% of adults between the ages of 18 and 29 say they use it."

"There is no shame in getting an Instagram result, but there is tremendous glory in building a stand-alone multibillion-dollar company," according to Shervin Pishevar, an entrepreneur co-founder of venture-capital firm Sherpa Ventures and citing Facebook's $1 billion deal for Instagram. (WSJ)

"A college dropout running a company with almost no assets, no revenue and a mountain of legal problems, (Evan) Spiegel is betting Snapchat can transcend the stigma of the 'next big thing' and become an industry unto its own….either one of the most brilliant entrepreneurs ever, or a delusional fool." –Breakout on Yahoo, which delved into what it called the "sext message" origins of the service.

And The Street had an interesting take, calling it "revenues versus retinas," saying somewhat incredulously:

Snapchat's potential business model is harder to see, given the messages disappear after users open them…it's also not an open platform ala Twitter or Instagram…That said, Facebook, Google and perhaps others don't care about revenue right now. It's all about eyeballs and engagement, and Snapchat has more of that than perhaps any other messaging platform…

Perhaps the most outrageous commentary actually came back in July, as the "dark side" of Snapchat was explored by betabeat.com:

Last month, we heard rumblings that Wall Street banker bro's were using Snapchat to send "weird shit" (read "sexting") but permanently aggravated CNBC host Jim Cramer thinks it's being used for something more sinister…Mr. Cramer told U.S. Attorney Preet Bharara that he thinks bankers are using the ephemeral app for insider trading.

Moving on from Snapchat, one thing surely did not "disappear" this week–the remarkably buoyant stock market, fueled by Janet Yellen's confirmation hearing remarks.

According to most observers, it became something of a "lovefest," and CNBC's Art Cashin remarked, according to Barron's, that " the Senate panel did everything but buy her a corsage."

Yellen, in many different variations of the theme, made it clear that, "We expect to maintain a highly accommodative stance."

This seemingly was THE driving factor in yet more record highs for the Dow and S&P, and the Nasdaq is threatening the 4,000 mark for the first time since 2000. On the week, the Dow logged a 1.3% increase, the S&P gained +1.7%, and the Nasdaq led, up 1.7%. Schaeffer's Research noted, "Bulls should find it encouraging that the COMP took out the lesser-followed 3,900 century mark, which is triple the 1,300 low in March 2009."

The WSJ's Fed watcher Jon Hilsenrath (along with colleague Victoria McGrane) said of Yellen's Senate Banking Committee performance:

'There is no set time,' Ms. Yellen said (referring to the start of 'tapering')… With those and other carefully crafted comments on a variety of policy issues, Ms. Yellen signaled a plan for continuity at the Fed and passed her first leadership test without alienating two key audiences: the lawmakers quizzing her, and financial markets…Republicans, though skeptical of the Fed's easy-money policies, treated the Democrat with almost uniform deference.

Forbes take on Yellen's testimony headlined, "No Equity Bubble, No Real Estate Bubble, And No QE Taper Yet":

In her first public appearance as nominee to succeed Fed Chairman Ben Bernanke, Janet Yellen faced the Senate Banking Committee, reiterating her intention to keep the monetary spigots wide open while rejecting the notion that we are seeing asset bubbles as a consequence of quantitative easing.  Yellen noted there is 'no set time' for tapering, implicitly admitted the Fed lost control of the market during the summer so-called taper tantrum, and agreed that investors buy gold to protect from 'catastrophe.'

The other big story of the week remained the Affordable Care Act fiasco, where there were many developments:

President Obama gave something of a public mea culpa, famously saying: "We did fumble the ball." According to ABC News' analysis:

We heard the president admit that the federal government screwed up on a huge project it might never been able to handle; that his own "credibility" is suffering after he misled the public on a core promise on which he built his signature accomplishment; that a broken website might not be completely fixed by a new, self-imposed deadline; and that he's only now discovering such things as 'insurance is complicated to buy.'

Bill Clinton piled on a bit, in what many were calling a barely disguised move to distance Hillary Clinton from the Obama White House, and said, "Even if it takes a change in the law, the president should honor the commitment the federal government made to those people and let them keep what they've got." The NY Post said Clinton added, regarding young, healthy consumers, "They were the ones who heard the promise that if you like what you've got you can keep it."

And late in the week, according to the WSJ's Saturday headline, "Democrats Defect on Health," as "the GOP proposal on canceled coverage garnered 39 votes from across the aisle, despite Obama's veto threat."

We will close It out there with one more social media story, which is being called by Rolling Stone an "All-Time PR Fiasco." This, of course, involved #AskJPM, which was JPMorgan Chase's ill-advised and very short-lived attempt at a social media strategy inviting consumers to come forward on Twitter to engage JPM:

What career advice would you ask a leading exec at a global firm? Tweet a Q using #AskJPM. On 11/14 a $JPM leader takes over @JPMorgan

Rolling Stone said of the effort:

Only on Wall Street would a bank that's about to pay out the biggest settlement in the history of settlements unironically engage the public, expecting ordinary people to sincerely ask one of their top-decision makers for career advice.

Forbes noted one of the hundreds of Tweets JPM's effort brought forth, which is not exactly what the company and Vice Chairman Jimmy Lee had in mind:

Scott Miller  @toastscott How many Dimons does it take to screw in a light bulb? 3.  One to finance it, one to foreclose on it, and one to point and laugh. #askJPM

Bloomberg reported on JPM quickly throwing in the towel on the effort:

'#Badidea! Back to the drawing board,' the bank posted less than six hours after its original post, which drew more than 6,000 responses from users in that span, according to social media tracking service Topsy.

On a far more serious note, prayers and heartfelt wishes here for the people of the Philippines. The BBC and others are thankfully reporting that "The international aid effort in parts of the Philippines devastated by Typhoon Haiyan is starting to have a major impact, with tens of thousands of victims receiving supplies. Patrick Fuller of the International Federation of the Red Cross told the Associated Press news agency: 'At the moment we are ramping up a major relief effort and the supplies are coming in.'

 

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