In 2011, Evan Spiegel, Reggie Brown, and Bobby Murphy created Snapchat, an app that allows users to send videos and photos. Today, Snapchat is one of the most influential social media platforms. In the first quarter of 2019, Snapchat daily users numbered 203 million worldwide.
Of these, 61% are women. Each day, Snapchat users send more than 3.5 billion snaps. On average, a single Snapchat user sends 24 snaps a day. When it comes to revenue, Snapchat earned $1.2 billion in 2018, while in the second quarter of 2019, the company made $388 million.
Want to know how to buy Snapchat stock?
What is Snapchat?
Snapchat is a mobile messaging app that enables users to share videos, photos, and drawings. Also called snaps, the videos, photos, and drawings disappear after users view them. Developed by Snap, Inc, the app is a new kind of camera that connects friends globally.
Today, more than 180 million people use the app to play, learn, and chat. Available in 22 languages, its compatible with Android and iOS devices. Snapchat users can enhance photos and videos by adding lenses, filters, and other effects.
A Brief History and Achievements of Snapchat
In 2011, Reggie Brown approached Evan Spiegel and Bobby Murphy with the idea of Snapchat while still students at Stanford University. Bobby Murphy had the coding experience while Evan Spiegel had business experience.
Launched in July 2011, Snapchat was first called Picaboo. By September of the same year, the social media company became Snapchat. In the early days, Snapchat allowed users to send and receive both photo and video messages of up to 10 seconds.
In 2013, Snapchat introduced Stories, a feature that Instagram, Facebook, and other social media platforms later integrated into their platforms. The stories are available for 24 hours, and any Snapchat user can view the content as long as they followed the content creator.
Evan Spiegel, Snapchat CEO, first published a blog in May 2012. The blog detailed what Snapchat users should expect in the future from the app. He also explained that Snapchat was not about capturing the “traditional Kodak moments” but an app that improves the interactivity between friends.
In the same year, Snapchat, Inc launched Snapchat for Android on Google Play Store. As a result, its userbase grew to 100,000+ users. The company also introduced Banquo, version 5.0 for iOS devices. The update improved on the app’s design and speed.
This includes swipe navigation, enhanced friend finder, and in-app profiles. In the same year, Snapchat also introduced Snapkidz intended for users aged 13 years and below.
Here is a list of more achievements by Snapchat.
- Geofilters and Our Story – Introduced in 2014, the Our Story feature allows users to add one shared Snapchat Story. In the same year, Snapchat made a deal with Square Cash, which enables users to send and receive cash via the app.
- Two billion videos sent each day by 2015. The number rose to 10 billion by the end of the year. The company also introduced Discover, a section with content from media partners such as CNN and Comedy Central.
- Snapchat rebrands to Snapchat, Inc.
- Spectacles introduced in 2017. As a result, Snapchat’s userbase grew to 166 million active daily users, and its market capitalization rose to $24 billion. The company went public in the same year.
Snapchat Stock Value
In 2016, Snapchat raised $1.81 billion in an equity offering, and come 2017, the company officially announced plans for an IPO. In the IPO, the company expected to raise $3 billion. Snapchat, Inc went public in March 2017 under the trading symbol SNAP.
At the IPO, the company priced its stock at $17 a share, which was higher compared to the proposed range of $14 to $16. The company’s market capitalization rose to $24 billion. In November 2019, Snapchat’s market capitalization stood at $21.112 billion, while its stock price was $15.08.
One of the reasons why Snapchat, Inc share price dropped was due to the redesign of its app in 2018. When the company made the changes, 1.2 million users petitioned it to revert to its original design. This was after Kylie Jenner publicly criticized the redesign.
Due to the redesign, the daily active users only rose by 2%. Also, its stock fell by more than 15% after the release of the earnings report.
In 2019 after its latest earnings report, its share value rose by 16.2%. Revenue surged to $446.2 million, a 49.9% increase.
How to Buy Snapchat Stock
Buying Snapchat stock is surprisingly easy. There are four steps involved.
Step One – Research the Company
Before buying Snapchat stock, it is essential to research the company. By doing so, you learn what the future holds for the company. So, what information should you look for? Start by assessing Snapchat’s quantitative results. That includes historical data, revenue, earning, competitive landscape, about management, and others.
For instance, Snapchat introduced the Stories feature back in 2013. Other social media platforms like Facebook and Instagram incorporated the same feature. What this tells you is that Snapchat has fierce competition.
This means, every time they roll out new features, other social media platforms may incorporate them to remain competitive.
Step Two – Decide How Many Shares You Can Afford to Buy
Now that you have analyzed the company and determined it’s a great long-term investment, its time to decide how many shares you can afford to buy. The first thing you need to know is that Snapchat stock is volatile. As such, you should not invest money you may need soon.
It’s also important not to invest more than 10% of your total portfolio in individual stocks. This way, you can diversify your portfolio and spread your risk. Snapchat stock is within the budget. As such, you can buy a few hundred or a thousand shares.
Step Three – Open a Brokerage Account
To buy Snapchat shares, you need money and a broker. You already have the money, and so, its time to open a brokerage account. Since you are investing money that you don’t need in the next five years, you need to find an online broker who is reputable and charges low trading commissions.
Why? You may want to diversify your portfolio and invest in other assets. A quick search on Google using the keyword “best online broker” will return 172 million results in 0.61 seconds. Once you choose the right online broker, open an account.
This takes less than 10 minutes. All you need to do is complete the online application and make the initial deposit. Once you fund your account, you are ready to buy Snapchat stock. Remember, stick with cash account if it’s your first-time trading.
Step Four – Purchase Snapchat Shares
To buy Snapchat stock, search for the company’s ticker symbol “SNAP”. Proceed by specifying the number of shares you intend to purchase. Select your order type. You have the following choices:
- Market Order – instructs the brokerage to buy the stock at the best available price at that time.
- Limit Order – instructs the brokerage to buy the stock at a specific price.
Once you hit the “Execute Trade” button, the online broker will present a screen showing what you are about to buy. The reason for doing so is to ensure that traders do not execute unwanted trades. After executing the trade, an email is sent confirming your purchase.
Now, you are the proud owner of Snapchat stock.
Growing Your Portfolio
Since you have made your initial investment, you may decide to increase your shares at a later date. To do this, you need to keep abreast of the performance of the stock. That means, reading company news and keeping an eye on the share price.
In case the price drops, you should place a stop loss order to protect your position from losing more money than you are comfortable with.
Best of luck!