The Fiat aristocracy: Evan Spiegel's Snap, Inc.

A decade later, and SNAP, Inc.'s initial hype has faded, and its stock is currently languishing near its all-time lows. Intense competition from TikTok, Facebook, and Instagram has affected its bottom line. Snap, Inc. is a money-losing pit with no end in sight. But its management appears more concerned with lining its own pockets. As noted by AlfredoAllenPoe on a Reddit post:

"Outside of their unprofitability and low quality platform and user base, a big problem with Snapchat is share-based compensation funneling investor cash to employees, particularly the executives.

In 2015, Snapchat had 1.02B outstanding shares. By 2023, this increase to 1.61B outstanding shares. If the market cap stayed constant from 2015-2023, the value of every share held in 2015 would’ve lost 36.6% of its value.

Snapchat essentially just funnels cash from dumb investors to its executives, like many shitty companies (WeWork also comes to mind). CEO is capable of running the company; he is just running it for his own benefit.

Let's cut to the chase here, Snap, Inc. is an unprofitable undertaking unworthy of a serious investor's capital. Given its current trajectory in the hyper-competitive social media ecosystem, the company remains extremely overvalued at its current $12B market capitalization.

In its latest 10-Q, the company stated:

We have incurred operating losses in the past, and may not be able to attain and sustain profitability.

We began commercial operations in 2011 and we have historically experienced net losses and negative cash flows from operations. As of June 30, 2025, we had an accumulated deficit of $13.6 billion and for the three months ended June 30, 2025, we had a net loss of $262.6 million. We expect our operating expenses to increase in the future as we expand our operations. We may incur significant losses in the future for many reasons, including due to the other risks and uncertainties described in this report. Additionally, we may encounter unforeseen expenses, operating delays, or other unknown factors that may result in losses in future periods. If our revenue does not grow at a greater rate than our expenses, our business may be seriously harmed and we may not be able to attain and sustain profitability.

I wrote this article last year but the recent headlines have brought the company to the forefront news. Snapchat is basically a wealth extraction company for its insiders. It is a value trap and nothing more.