Another volatile week for many stocks, and Snap Inc. (SNAP) is no exception. The younger generations' favorite toy and social media tool has gotten clobbered for the good part of a five months now, but just in the last few days the stock has made a comeback. Not a big one yet, but one worth considering now that the weak hands have been blown out of it.
I also remember John Monroe from our Elite Opportunity Pro saying a few weeks ago, "When SNAP gets down around $12 it's a buy around that level". Well, it hit just under $12 and has come right back for two consecutive days now. So, is it a buy now or not?
I personally think it's a buy right now - SNAP is worth the risk to me. Sure, the company isn't quite sure how they're really going to monetize their platform over the next several years. However, content is king and literally just about every youth who's old enough to have a mobile device out there has a Snapchat account. It's really cult like - believe me, my nephews, my own sons and all of their friends are on it.
I don't know about you, but it's a pretty big annoyance to me. Many people spend more time glued to their phones these days, than they actually do developing real face to face meaningful relationships - a problem I think that's going to continue to grow bigger and bigger.
Then again, maybe I'm just old - that's what the young ones tell me. You don't understand they say! I don't? OK, if you say so.
I digress. So, from strictly an investing opportunity, why could SNAP end up being such a big deal? It reminds me of what many attributed McDonald's early success to - they use to say, get the kids to come in and love the place, and we'll have them forever.
I liken that to what is probably going to end up happening with SNAP. Remember, they arguably have the largest youth database in the country - maybe on the planet. So, although the company continues to make many public company mistakes so far, they'll probably figure it out, and more importantly find a way to significantly monetize their company.
There's so many different ways they could do it that it's mind boggling. Video content rules now. It's all about mobile. It's all about social media. And, it's definitely all about your company going where every single one of your customers go. That's SNAP.
Another few compelling points for the stock are; usually IPO's get blasted by Wall Street before they make their biggest moves - another lesson learned from John Monroe.
Second, the company has over $3B in cash, yes with a B. I'd take those two metrics right now as reasons to buy some SNAP and tuck it away.
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