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ANALYSIS: Facebook Is Kicking The Sh*t Out Of SNAP

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Five years ago, Snapchat was the hottest thing around, more popular among users than social media kins Facebook and Instagram.

These days? Not, so much.

For one, since last year’s IPO—then labeled “one of biggest Wall Street flops“—the stock’s been dropping like crazy.

Since February, around the time a single Kylie Jenner tweet wiped out $1.3B in company value, Snap has dropped from a public valuation of $24B to $14B.

And get this: According to its Q2 report, Snap users are dropping like flies. Since Q1, a whopping 3M users have ditched Snap—the first time user count has dropped quarter-over-quarter in the company’s history.

And yes, Facebook has taken some legal hits lately, but Snap could be facing a battle much bigger.

If you can’t buy ’em, steal ’em (their users, that is)

While users are dropping en masse, Snap still sports a robust 188M daily user base. But competition from rivals is getting more intense by the day.

Facebook—who actually tried to buy Snap for $3B in 2013—saw its user base increase to 1.47 billion over the same period.

And powered in large part by their Snapchat story clone Instagram Stories, Instagram has grown to 400M users—more than double Snap’s user count.

Oh, it gets worse.

WhatsApp, another Facebook property, has their own version of Snapchat’s major value prop (WhatsApp Status), leaving you wondering exactly what Snap has to offer.

Users could be wondering the same.

For whatever it’s worth, while Snap’s user count has eroded, WhatsApp has seen a healthy spike in active users, peaking at nearly 450M.

Facebook Stories (at this stage, you get the point) boasts of over 150M users, as well.

When the decline began…

In the chart, we can see that Snap’s user growth has been severely impacted post the release of Instagram Stories two years ago. While Snap’s daily active users (DAU) rose 48% year-over-year in 2016, it fell to 18% towards the end of 2017. An extremely telling blow.

But it’s not just Zuckerberg…

From a business model standpoint, Snap is similar to the other internet blue-chippers (think Facebook, Google, Twitter, etc.). Their revenue is pretty much all advertising income; a total of 97% in 2017.

But that’s pretty much where the comparison ends. Unlike the other tech giants, Snap must be thinking they’re Big Meech or Larry Hoover, because they are blowing money fast. 

Compared to Facebook, Twitter and Google—which have gross margins of 85%, 67%, and 57%, respectively—Snap has a paltry gross margin of 20%.

No way?

Yes way. Snap’s expected to continue to post negative margins in the short term. And they will need to figure out how to boost their average revenue per user (ARPU) substantially if they even want to think about being profitable.

Initially billed as the new Facebook, Snap has pretty much struggled to keep up according to every relevant metric since its IPO.

Facebook, on the other hand? Sure, they had a rough start when they debuted on Wall Street in 2012. But since then, Facebook’s enjoying healthy profits, racking in billions of dollars after tax.

And more importantly, Facebook’s market value has 10X’d, jumping from a $50.92B low to $520B as of Aug. 31, 2018. (They’ve been as high as $615B on July 16.)

So what can Snap do?!

Hard to say. It’s not just Facebook that’s kicking Snap’s rear end. They’re also way behind Twitter in terms of profitability.

In order for Snap to catch up with Twitter’s current growth, Snap will have to increase annual revenue by 46%.

Facebook recovered after a rough start, why won’t Snap?

Well, in theory they could. Facebook did, right? And Facebook’s first few years were much worse.

Valid point, yes. But a couple of key points to consider. For one, Facebook was already the most sought-after social media platform when it went public. That wasn’t really the case with Snap.

And secondly, in order to achieve robust revenue growth, Snap will have to gain market share from Facebook—basically steal its users back. And at this point, that looks almost impossible.

But crazier things have happened. Snap away, WealthGANG…

Money

CHART: How Blockchain Powers Bitcoin

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Blockchain, Bitcoin. Bitcoin, blockchain.

The two terms go hand in hand—and have become almost ubiquitous with this year’s insane rise (and fall) of Bitcoin.

But what does it all really mean? How does it come together? In this week’s chart, our friends at CB Insights break down exactly how blockchain powers Bitcoin.

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Business

This Mogul Became America’s 1st Black Billion-Dollar Businesswoman

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Sheila Johnson.

Where to start?

She’s the first black billion-dollar businesswoman. Before Oprah Winfrey.

She started as a TV executive, founding Black Entertainment Television (BET), the first TV network targeting African Americans. She then became a real estate mogul.

Oh, she also owns a stake in three major sports franchises, the NBA Wizards, NHL Capitals and the WNBA Mystics, the African American, period, to boast that claim.

In honor of Black History Month, let’s dive into her remarkable career.

FAST FACTS:

  • Born Sheila Crump in McKeesport, Pennsylvania, Johnson co-founded BET in 1979 with then-husband Robert Johnson. The couple sold it to Viacom in 2000 for $2.9B
  • Sheila Crump Johnson became the first African American woman on the Forbes’ Billionaire list in 2000—beating Oprah Winfrey to the distinction.
  • Per Forbes, Johnson has an $820M net worth as of 2019

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Foray into real estate…

After closing the sale to Viacom, Robert and Sheila pocketed around $1.5B each. Johnson used that windfall as seed money to build a hospitality real estate empire in 2005.

“There’s a disparity in paychecks between whites and blacks,” she told the Wall Street Journal. “I will never forget that.”

As CEO of Salamander Hotels and Resorts, Sheila controls a spectacular portfolio of six luxury hotels in Florida, Virginia and South Carolina. And she’s built it from the ground up—literally—in her own spirit.

“I’ve been to many hotels, not only in the US, but all over the world,” she told Forbes last year. “And I wanted to find something that was going to really make Salamander stand out beyond all of these hotels.”

So what does that mean?

“You have to understand, there are a lot of people, investment companies, with very deep pockets,” she says. “They can do it, but they don’t have the experiences that we’re able to bring. I am constantly trying to find a way to help Salamander Resort & Spa stand out head over heels above any other hotel — not only in the area, but in the nation.

“I want them to leave that resort wanting to come back and not just say, ‘I’ll be back in six months.’ I want them to come back all the time.”

And so far it’s worked. In fact, on Forbes Travel Guide’s 61st list of Star-Rated hotels, Johnson’s Salamander Resort & Spa outside of Washington, DC earned a Five-Star distinction.

Image Credit: Salamander Resort & Spa

Forbes: “Everything [she] touches turns to gold.”

That’s a real quote. From Forbes. Last year. It’s also true.

BET? Billion-dollar exit. Washington Capitals? Stanley Cup.

And Roma. Won 10 Oscars. Who showed it before a single soul started caring? Johnson’s Middleburg Film Festival. (Which, by the way, has 32 films and counting in Academy Award contention.)

Remember her golf resort at Innisbrook? Oh, yeah. Hosts the Valspar Championship, one of the PGA calendar’s most-anticipated tournaments.

Becoming a billionaire comes with a new level of clout as well. “When you don’t have money, you’re not invited to special events; you really don’t matter,” she told WSJ. “It’s a society thing.”

So instead, she’s turned to giving back. Her Sheila Johnson Fellowship’s paid for more then 40 scholarships at Harvard University for students who otherwise wouldn’t afford to attend.

Image result for sheila johnson"

Breaking glass ceilings. 

There’s an alarming statistic in business and diversity—especially as it pertains to women. According to research by investor Richard Kerby, 18% of all VCs are women—and only 3% are black. In addition, less than 50 black women ever have raised $1M in funding.

“When I got started,” Johnson says, “I couldn’t get a loan. I had to use my own money to get Salamander Resort and Spa.”

She explained to WSJ last year that men can go to any bank with a bank proposal. And no matter how “wacky” the idea is, she said, “they’re going to get the financing. Women do not have that ability.”

Johnson’s taken it upon herself to do something about that, becoming one of the founding partners of WE Capital, an investment firm that invests in female entrepreneurs.

“I started out in a very unique position where I had my own capital to be able to get started,” she says. “But there have got to be banks and investors that believe in helping women who want to be entrepreneurs in the hospitality business.

“And it’s just really, really important that they really take a look at this.”

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Money

VIDEO: How Far Does $150K A Year Get You In New York City?

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Source: HuffPost

No matter what metric or list you look at, it goes without saying: New York City is one of the most expensive places in the world to live in.

In this video, CNBC spoke to a Millennial who runs her own brand consulting agency and wants to #WealthHACK her way to retirement by 40.

She makes $150K a year. But how far does that actually get her? Check it out.

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