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Snap CEO Evan Spiegel Single-Handedly Drove First-Quarter Losses With Massive IPO Bonus
Snap CEO Evan Spiegel Single-Handedly Drove First-Quarter Losses With Massive IPO Bonus.
Of that, $2 billion was directly related to stock-based compensation (SBC) expenses that were recognized during the quarter in connection with the company’s IPO.
You may recall that immediately after its IPO, Snap awarded Spiegel with a massive bonus for taking the company public, a process that inevitably entailed him cashing out nearly $300 million in stock.
For starters, the award vested immediately and as such comes with no requirement that Spiegel stay with the company.
The shares vested immediately, but Snap will deliver these shares to Spiegel in quarterly installments over the next three years, although it has recognized the related SBC cost now.
The CEO award compensation expense will be recognized immediately on the closing of the initial public offering.
Snap initially estimated that the SBC expense associated with this CEO award would be $624.8 million, but that was based on an award of 36.8 million shares.
Since Spiegel received more shares than expected, investors can now deduce that the SBC expense directly related to Spiegel’s award was more like $636.6 million.
What we can say is that if Snap had only recognized one quarter’s worth of the award based on the $17 IPO price, the SBC cost would have only been $53 million.
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Snap CEO Evan Spiegel Single-Handedly Drove First-Quarter Losses With Massive IPO Bonus
Author: Evan Niu / Source: The Motley Fool Snapchat operator Snap (NYSE:SNAP) just reported a massive $2.2 billion net loss for the first quarter. Of that, $2 billion was directly related to stock-based compensation (SBC) expenses that were recognized during...
On-demand road freight startup Ontruck pulls in $10M Series A led by Atomico and Idinvest
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The banks that were in charge of Snap’s IPO love it — even after the company’s disastrous earnings report
The banks that were in charge of Snap’s IPO love it — even after the company’s disastrous earnings report. “A stronger Android offering could lead to faster long-term DAU growth,” the firm wrote.
The company’s engagement was strong in the first quarter, while time spent per user also rose to more than 30 minutes a day.
Snap’s first-quarter ad load was still less than one ad per DAU, per hour, which badly lags Facebook and Instagram.
Goldman’s price target stems from an enterprise-value-to-sales multiple that far exceeds the internet sector average.
They forecast compound annual growth from 2016 through 2019 at more than five times that of the broader internet industry.
Price target: $27 Deutsche Bank, which also served as an underwriter on the IPO and received the fourth-most shares after the offering priced, also has a buy rating on Snap’s stock and a price target of $23.
The firm said it still believed in “the management team’s ability to innovate on product and ultimately grow and monetize the user base.”
JPMorgan, which got the third-most shares following the IPO, lowered its price target to $20 from $24, maintaining a hold rating on Snap’s stock.
More: Stocks Stock Market SNAP analyst ratings
The banks that were in charge of Snap’s IPO love it — even after the company’s disastrous earnings report
Author: Joe Ciolli / Source: Business Insider Snapchat cofounders Bobby Murphy, left, and CEO Evan Spiegel at the New York Stock Exchange as the company celebrated its initial public offering on March 2. Richard Drew/AP The banks that led Snap's initial...
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