Further, if anybody had actually followed any of the short advice that has been given in HN comments in the past 10 years, they almost certainly would have lost unlimited amounts of money.
If you really want to put your money where your mouth is, post some bitcoin, a term period and a price target and see if anyone takes you up one it. I'd almost certainly book everything you offer on SNAP going to $0 in 5 years.
The cost of LEAPS is very high when they are purchased on speculative companies. For example, take Tesla.
Tesla closed today at $250. To purchase an "at the money" $250 put dated January 2019 (aka a LEAP) would cost you $54. So TSLA stock would need to fall below $196 at expiration before you began to make money on it. That's a simplification because you could always sell your put early, possibly at a profit. Buying a January 2018 put would be cheaper, but still quite expensive at $37.
To reduce the cost of a put you can buy one that is "out of the money". For example the TSLA $200 put dated January 2019 would be cheaper, only $31. However, TSLA would need to fall below $169 before you made any money at expiration.
So, look at that last example. TSLA now $250, you pay $31 now and you don't make money unless TSLA closes below $169 at expiration.
Math like that is why sophisticated investors often short stock rather than buy puts. They need to pay a price to "borrow" the stock to short but for many companies that price is quite low, below 10% a year. The cost of buying put options on the same stock could be two or three times as high as directly shorting the stock.
When SNAP puts become available I expect the math to be much worse than for TSLA. It will cost A LOT to buy puts on such a speculative company. In trader talk, the "implied volatility" will be very high.
The vast majority of their revenue is still from AdWords despite those billions being spent, but that GOOG pie's only grown over time.
Same probably goes to %99.9 of all investors as well, otherwise those %99.9 would have been rich from buying Google after their IPO.
Being short sighted is a humans' thing, probably. not a tech CEOs' thing..
A 17x return over 12 years won't make most (non-rich) investors rich unless they bet every dollar they have on said investment (a nearly impossible and entirely impractical scenario).
An average investor betting $10,000 - $25,000 on Google's IPO would be a serious investment. $170,000 - $425,000 is a great return off of that, it's just not anywhere near rich.
Had they IPO'd at something more like what tech companies used to, an investor could have seen a 250x to 1000x return up to this point. That would make you rich off of a $10k bet. Amazon for example, has produced something like a 560x return so far from the IPO.
Assuming you are talking about this sentence from the "risk factors" section of their S-1:
> We have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability.
That's relatively boilerplate and doesn't really mean much. The "risk factors" section is always very gloom-and-doom to avoid the appearance of over-promising returns. For example, Workday said "we have a history of cumulative losses and we do not expect to be profitable for the foreseeable future" in their risk factors. Shake Shack included "our inability to open profitable Shacks" as a risk factor in their S-1. Google listed pages and pages of "risks" that basically boiled down to "advertisers might stop using us". It's really not that unusual to say something like that.
You might be right and Snap could be headed for a big fall, but that statement alone isn't much of an indicator.
What does this sentence mean?
I'm positioning myself for massive fiscal stimulus (that was denied the Democratic president) and higher stock prices. I guess we'll see.
The closest thing to fiscal stimulus we're likely to see is top-weighted tax cuts, which are ineffective stimulus at best, and what benefit can be derived from them has pretty well been looked over the last several decades.
OTOH, top-weighted and particularly corporate tax cuts are likely to improve stock market returns in the short term, so, maybe not so bad a position to be in if you can time your exit right.
'feeling like' is not a good way to convincing me to short something. nor long. nor anything ;)
> ..., but I feel like the multiplied probabilities of both make it as clear a bet as you ever get
So you 'feel' like it would be a 'clear bet' ? sounds like a big maybe to me.
How about NOT shorting/longing at all ? I feel like this is the clearest bet for me ;)
(edit: spacing)
My 5 year target on SNAP would be roughly one can of Pringles. When the next market meltdown happens, Michael Lewis will write a great book about people buying non-voting shares of a fad company at a $24b valuation that says in its prospectus that it has no plans to make money and maybe never will.
Or I'm wrong and they won't be a fad and will figure out how to monetize, but I feel like the multiplied probabilities of both make it as clear a bet as you ever get.