Soooo, Let's think about this. It looks painfully obvious this would be a "sell the straddle" play right? 18%?!!! So we have $11.80 on the upside. There's no way, I don't think, unless dau's fall off a cliff, this thing will go below $7.20 on the downside... So with all that said, and taking into consideration the tried and true fact that if it looks too easy to make money... (ie sell the straddle in this case).... and that "easy money" rarely works out that way... I'm gonna say this thing is gonna blast up... like a north of $12 blast. There's no way it can't. SNAP---> $10.10
Oops... that would be $8.20 on the downside, not $7.20. Duhhh. Hmmm. Now that might be more in line if they don't hit those forecast numbers. But again, at $8.20 it should still be a steal. They just have to improve those net margins and the bottom line eps should swell going forward.
So the two things to key in on in their release... they need to see a respectable increase in daily active users, but the real biggie I wanna see... I wanna see a 500 bps increase in their net margin, I think there was enough low hanging fat to accomplish that, with more improvements going forward. Not too worried about ad-spend this time around... unless it comes in horrible, but I don't think it will.
HEY GUYS SUPER BUSY// I JUST SWAPPED OUT MGM CAN'T TAKE IT ANYMORE AND BOUGHT PAYPAL. Price and EPS Surprise BASING...... EARN SHOULD BEAT... BELIEVE NEW CEO IS COMING?
OK.... Some more on SNAP as I have been doing more digging. Here's a potential problem. They held off instituting a bunch of changes in Q4 so as not to disrupt the system during their advertisers' most important quarter. IE, leave well enough alone for now, but we know we can improve, so all these things we've been working on, they get rolling in Q1. Uh-huh. As in "unproven" things? >>>That worries me. Many of these changes center around better optimization of ML, customer conversion, etc. A lot of behind the scenes stuff. This could be a big headwind for this quarter's numbers imo. The analysts are gonna focus on how these changes are working. I think it'll be too early to definitively tell. There's one more thing... they had an invite only investor meeting on Feb 16th at their HQ. Within 2.5 days, the stock went from $11.20 to $9.80 ish. A 10% drop while the QQQ's had a relatively normal .8% drop. But if you look at a 5 minute chart, you'll see that drop started at would I would assume was the actual end of that meeting. IE 2:20PM est, 11:20 Pacific. Apparently some analysts/investors there didn't like what they heard and couldn't get on their phones fast enough. Speculation my part I guess, but that's what it looks like to me looking at that chart. But I wasn't there. There has also been some large blocks of put buying at the ask over the last week. I don't like that either. In a nutshell, for anyone reading this... proceed with caution. This might be another one of those quarters that does not impress. That $8.20 lower limit.... after my last 2 hours of DD into the obscure things no one else looks at... could easily happen. It's $10.40 now. Nice run from $10 earlier I guess... but if anyone is playing it, I'd take some off before the close. jmho