Thomas Nearly (President, NYSE) :
NYSE: Hello friends, my name is Thomas Nearly, and I am the current President of the NYSE (New York Strock Exchange). You may be amazed to know that I have a CFA certification myself.

Eagle Spiegel (CEO, Snap Inc.) :
CEO: Hello, I'm Eagle Spiegel - the CEO of Snap Inc. and the creator of Snapchat. I was studying Product Design at Stanford and left it just before getting my degree so that I could focus on Snapchat. I'm glad you guys love it.

Uneven Williams (Former CEO, Twitter) :
Twitter: Hi, Uneven Williams here. I am a programmer turned internet entrepreneur. To the public, I have been the former Chairman and CEO of Twiter. But only a few people actually know that I coined the famous word 'blogger'.

Thomas Nearly (President, NYSE) :
NYSE: Unevan and Gross, there was an article by Business Insider, where Morgan Stanley admitted to making an error in Snapchat valuation. It scares me: are analysts turning irresponsible?

Gross Seymore (Analyst, Deutsche Bank) :
Analyst: Yes, I remember this. In spite of lowering the projected revenues, the price targets were the same. It was hilarious!

Eagle Spiegel (CEO, Snap Inc.) :
CEO: Well, It was an honest mistake. They found two offsetting errors which neutralized one other. And let's not forget the strong fundamentals of the company.

Uneven Williams (Former CEO, Twitter) :
Twitter: Evan, I’m sure that you know that it’s a high profile IPO, another social media company going public at valuations that most people have trouble grappling with.

Eagle Spiegel (CEO, Snap Inc.) :
CEO: Evan, there's nothing high profile. Our philosophy was very simple: we wanted people to share pictures and videos, but which disappear after some time.

Thomas Nearly (President, NYSE) :
NYSE: I'm confused. What would be the value of these disappearing pictures?

Gross Seymore (Analyst, Deutsche Bank) :
Analyst: Haha, these disappearing pictures are worth almost $30 billion apparently. At $21 a share. And that made the net worth of the founders almost $5 billion.

Uneven Williams (Former CEO, Twitter) :
Twitter: I agree with Thomas: why would you want the pictures to disappear when they can be deleted at the click of a button?

Eagle Spiegel (CEO, Snap Inc.) :
CEO: Hmmm...the logic is simple. We all have impulse control problem sometimes, and when we take pictures and when we send them to people sometimes we regret what we’ve done. We worked on this belief.

Gross Seymore (Analyst, Deutsche Bank) :
Analyst: No worries at all. But the interesting thing is that Snapchat was never Snapchat from the beginning. It was born as Picaboo.

Thomas Nearly (President, NYSE) :
NYSE: Well, Picaboo or not, most investors didn't take it seriously until the rumors that Facebook was trying to acquire Snapchat.

Uneven Williams (Former CEO, Twitter) :
Twitter: Yeah, at that point of time, the figure of $3 billion that Facebook was offering seemed quite big, especially because internet-based apps fade away pretty soon.

Gross Seymore (Analyst, Deutsche Bank) :
Analyst: Yes, very few companies like Facebook or Google are able to survive in the online space. So when Snap refused to be bought, we thought that the founders are mad.

Uneven Williams (Former CEO, Twitter) :
Twitter: Are you crazy? You’re turning down an offer for $3 billion, you could be wealthy beyond your wildest dreams and you have a company that has no revenues, no profits. So in any conventional intrinsic value measure nothing, why would you not take 3 billion?

Thomas Nearly (President, NYSE) :
NYSE: But it was Evan and Bobby who were laughing when they filed for the $20 billion IPO.

Eagle Spiegel (CEO, Snap Inc.) :
CEO: Yes, we are here to stay. We had around 161 million users when we filed for the IPO. And through the process, we have constantly added new features.

Gross Seymore (Analyst, Deutsche Bank) :
Analyst: But more critically, all these users are very engaged. Snapchat is actually second only to Facebook in terms of the time that people spend on the app.

Uneven Williams (Former CEO, Twitter) :
Twitter: And why wouldn't they? You give them something new. You started off with photo messaging, then moved to stories, added geo filters, then text chatting. What's next?

Eagle Spiegel (CEO, Snap Inc.) :
CEO: Eagle, we have big plans. As Gross said earlier, not everyone can survive in the internet space only with software. So hardware is our next step.

Thomas Nearly (President, NYSE) :
NYSE: Ladies and genetlemen, here come Snaptacles! You could wear these glasses to record video, real-time and then upload it to cloud. This gives POV a whole new meaning.

Uneven Williams (Former CEO, Twitter) :
Twitter: But in the valuation process, whats disturbing is that it calls itself a camera company. But it doesn’t sell camera, it doesn’t sell photos.

Eagle Spiegel (CEO, Snap Inc.) :
CEO: You could look at us in this way: a photo company, a picture company, a visual company. A social media company which is scented on the visual and that’s the message in us calling ourselves a camera company.

Gross Seymore (Analyst, Deutsche Bank) :
Analyst: Facebook and Instagram are primarily posting platforms, LinkedIn is a networking space, and Twitter is for punchy messages (the only ones driving it are celebrities). Where does Snapchat lie? Does it have a niche?

Thomas Nearly (President, NYSE) :
NYSE: I think Snapchat is the place you go if you’re a visually oriented person and you want to share pictures and videos. We'll accept that as the niche. But in your valuation, the most important thing is cashflows. AND SNAPCHAT DOESN'T HAVE ANY.

Gross Seymore (Analyst, Deutsche Bank) :
Analyst: Yeah, it doesn’t make money from selling hardware. The specs are there just so you are more engaged on the platform. I think that ultimately it will come down to selling ads through the platform.

Eagle Spiegel (CEO, Snap Inc.) :
CEO: So Ross, as an analyst are you implying that the future of Snapchat depends on the future of digital marketing and advertisements?

Thomas Nearly (President, NYSE) :
NYSE: I think that's what Ross is trying to do. And that means good news. By 2019, digital advertisement market shall be at $300 billion annually. And furthermore, mobile-based advertisements shall account for almost 60-65% of the digital marketing industry by 2019. So Snapchat shall be powerful enough to drive consumers' demands.

Thomas Nearly (President, NYSE) :
NYSE: But will Snap really flip it to their advantage? It isn't as easy as simply posting ads on the app. A lot more goes into it.

Uneven Williams (Former CEO, Twitter) :
Twitter: Yes, Google and Facebook control almost 60% of the digital advertisement market. Everybody else is only fighting for the minor shares. And let's not forget that those two are getting bigger. So getting space there is even more difficult.

Gross Seymore (Analyst, Deutsche Bank) :
Analyst: That's true. And it's difficult, too. When I want to value a young company, you don't have a history or past financials. What can we go on with? In other companies, I was at chapter 33 of a 35 chapter book, here I’m on Chapter 1.

Eagle Spiegel (CEO, Snap Inc.) :
CEO: What about our story? Doesn't Snap tell a compelling and moving story? Is it not the basis for our vision and future? Or are you worried that we're telling fairy tales?

Uneven Williams (Former CEO, Twitter) :
Twitter: It's not about fairytales, Eagle. If you look at Facebook, Google or Twitter at the time that they went public; and then look at Snap, you'll realize that they're in bad shape.

Thomas Nearly (President, NYSE) :
NYSE: True, the Twitter CEO is right. Snap actually has less revenue than any other companies other than LinkedIn, and it’s actually losing more money than any of these companies. That's bad, really bad.

Eagle Spiegel (CEO, Snap Inc.) :
CEO: We might have fewer users than Twitter and Facebook, but a more engagement rate (25 minutes average time) more than Twitter or LinkedIn.

Gross Seymore (Analyst, Deutsche Bank) :
Analyst: It's simple. The way I look at things, Snapchat will end up like Twitter. A company that has been able to grow revenues at a lower rate than people thought it could, but it’s not figured out a way to monetize its user base. It’s still losing money at a good rate.

Uneven Williams (Former CEO, Twitter) :
Twitter: No, I feel it will fall somewhere where LinkedIn is: less than the double-digit growth that Google has. That's because their user base is small: just a young tech-savvy crowd.

Eagle Spiegel (CEO, Snap Inc.) :
CEO: Don't forget: this segment of young people makes up for the largest portion in digital space. We're going to stay focused there.

Thomas Nearly (President, NYSE) :
NYSE: So unlike Twitter and LinkedIn who got caught in a number of users game, Snap is going for delivering more user minutes, i.e., engagement.

Gross Seymore (Analyst, Deutsche Bank) :
Analyst: So if in the first 5 years the revenues grow at 55%, by 2025 they'll have revenues of $10 billion. Although they'll never reach Facebook margins of 40-45%, they can get a 25% operating margin. Don't forget that they'll have to pay around $2 billion to Google for the cloud space and even pay around 30% of profits in taxes.

Uneven Williams (Former CEO, Twitter) :
Twitter: Yes, hey'll have to acquire new technology to stay ahead of the competition. Hence a lot of reinvestment will have to be done. Don't ignore that around 10% cost of capital is attached to equity in this space.

Gross Seymore (Analyst, Deutsche Bank) :
Analyst: Don't forget: since this is a young company, the chances of failure can be put up at 10%. So overall, my median value for this company is $13.3 billion, not the double of what it is shown right now.

Thomas Nearly (President, NYSE) :
NYSE: But if the revenues grow at 75%, it can even be worth $25 billion after 10 years, na?

Eagle Spiegel (CEO, Snap Inc.) :
CEO: Tell me something: If you are paying $12 billion for Twitter that seems incapable of converting users to profit, Microsoft pays $26 billion for LinkedIn, a stagnated at 5%, why shouldn’t you pay $20 billion for Snap?

Eagle Spiegel (CEO, Snap Inc.) :
CEO: The pricing is relevant; Eagle. You don’t have to show me the cash flows and revenues.

Uneven Williams (Former CEO, Twitter) :
Twitter: Your outlook will also depend on are you an investor or a trader. An investor will look for value, while a trader will only be looking to sell off at 25 billion.

Gross Seymore (Analyst, Deutsche Bank) :
Analyst: My advice is: ask the right questions, make the right judgment, and tell your own story about Snap.

Eagle Spiegel (CEO, Snap Inc.) :
CEO: Thank you, let's let time tell us the real story.