Snap - A Report Brought to You by Q8 Trade
Snap Inc. and investment importance at a glance
Snap Inc. is a social media company worth billions of dollars which developed the Snapchat, a popular social networking application.
This application was created by Evan Spiegel and Bobby Murphy and was released in 2011.
It is primarily used to send and share messages and also allows its users to take pictures and videos, add text and graphics, and it has a distinctive feature so that friends can see what you have shared during a specific period that may reach ten seconds and then disappear.
In 2013, Facebook made an offer to Evan Spiegel to acquire the popular application for $3 billion and Google made the same offer with a value of $4 billion.
He rejected both offers because of his certainty of the high value of his application in the future due to its rapid growth.
In 2014, a large number of newspapers, magazines and websites submitted reports on the amount of messages sent by Snapchat users.
As it turned out:
They exceed 700 million video and images on a daily basis and the number of users exceeds more than 100 million people around the world.
Statistics revealted that between the ages of 18 to 25 and represents 45 percent of its users.
In the last quarter of 2018, the company witnessed a 36 percent annual growth with a revenue of $390 million, an increase of $100 million over its revenue in the third quarter of the same year.
The company indicated that the primary reason for the company’s high revenue was due to the improvements in machine learning models for app installations.
At the beginning of 2019, the Snapchat application exceeded 200 million users on a daily basis and the company seeks to achieve many achievements.
The company has recovered some of its losses in 2018 due to the redesign of the Snapchat application.
This redesign caused the company’s shares to fall by an estimated 7 percent and in the second quarter of the same year, the company regained growth again with it shares rising to 12 percent.
Here are some facts:
Snapchat application users from the ages of 18 and 24 years, and their percentage reaches about 45% is distributed as follows:
- Application users ages 25 and 34 account for about 26 percent.
- Application users between the ages of 35 and 44 account for about 13 percent.
- Application users ages 45 and 54 account for about 10 percent.
- Application users ages 55 and 64 account for about 6 percent.
In March 2017, the initial offering of the Snapchat application was about $3.4 billion which exceeds the amount required for the subscription and the stock is traded on the New York Stock Exchange under the symbol SNAP.
Snapchat shares rose 44 percent on the first day they were listed, as there was a crazy rush to buy shares in the market.
This startup got the highest technical valuation in Wall Street history and investors put a whopping $29 billion price on the startup while most were happy with the rise in Wall Street indices.
The value of the application in the evaluation of the public offering was about 20 billion dollars.
In addition to that…
It is considered the highest evaluation in the offering in a technology company in the United States of America since the valuation of Facebook‘s offering in 2012.
How is share price of Snap determined?
Snap is the third most widely used social networking application in the world.
The price of its shares is affected by the levels of supply and demand for it, and therefore affects the value of the stock to increase or decrease its value.
The company has much more current assets than the current liabilities and its shares are affected by the profits of its advertisements.
To the price of the company’s shares, we find that it is highly volatile, as the stock rose by 44 percent on its first trading day, then fell to where it started, so investors preferred stocks that are largely stable.
In order to calculate the share price of Snapchat, you need to monitor the market well, especially the company’s annual earnings reports, and try to keep up with the economic news.
Looking at Snapchat revenue, which shows the extent of demand for the company’s services, we find:
Snapchat has made high leaps in terms of its revenue over three consecutive years.
In 2014, the company recorded revenues of $2 million to reach $58 million in 2015, then its revenue reached about $ 404 million during 2016, and in 2018 revenue decreased.
Because of the new design that the company introduced on the application, then it went back up in 2019, to exceed the company’s revenues of $ 320 million.
What factors affect the price of Snapchat?
One of the factors that lead to a decrease in the price of Snapchat’s share is the decrease in advertising profits.
Earlier, the American company warned its investors against slowing revenue growth and this slowdown led to a decline in the company’s share by 22 percent, and in the first quarter of last year, Snapchat advertising prices decreased by 65 percent, on an annual basis, and the company made an unsuccessful design, which resulted in a 19 percent drop in the stock during 2018, and it is also mentioned that an important factor in the drop in the share price is the decrease in the number of active users of the application, and the share price has fallen by about 12 American dollar.
On the other hand, there are some factors that lead to the increase in the share price of Snapchat, which is the increase in the number of active users of the application.
In February of 2018, the application achieved a significant increase in the share price, reaching $ 21.
What you should know before trading Snap stocks
There are some investors who will get, for the first time, some shares in the Snapchat app, they must know the size of the market shares that are acquired, so Evan Spiegel and Bobby Murphy obtained market shares in very large proportions after offering the shares of the application for subscription.
Knowing the number of users of the application, through which we learn about the success and expansion of the company and its attraction to many people around the world.
Knowing the amount of revenues achieved by the program, the company did not disclose the size of its revenues before, but it always reassures its investors of achieving great revenue ratios.
How to read Snapchat stock charts
The graph is considered one of the most important elements when deciding to enter the financial trading market, through which stock prices, trades and stock indexes can be determined quickly, and the chart is divided into two main types:
The schematic diagram: It is considered one of the easy and fast types to allow you to read prices faster, as it gives and clarifies the overall picture of the performance of Snapchat’s stock. The diagram is divided into two axes , a horizontal axis : it provides details regarding the time period, and a vertical axis : can Through it you follow the changes that occur in different shares of Snapchat.
Drawing of Japanese candles: Through it is possible to display the data that pertain to the stock very accurately, so traders can make important decisions regarding financial trading due to its extreme accuracy in showing details.
Snap stock trading via CFDs
Contracts for difference are contracts that are negotiable between the person who is trading and the middleman, trading is by exchanging the difference in the financial value at the beginning of the contract for the stock, and its value at the date of the end of this contract, without buying and actually owning the main financial assets.
CFDs are derivative financial instruments through which a trader can benefit from the movement of the price of financial instruments up or down without actually having them.
Trading CFDs on stocks gives you access to the stock market, trading against movements in the company’s stock price, without having real ownership of the shares of the asset you are trading in, and these are considered to be one of the most important advantages of CFD trading, for a trader is protected and has nothing to do with any events You may catch up with the company like bankruptcy or closure.
How contracts for difference work
A trader chooses an asset, whether a stock, currency, or index, which the broker offers to trade as a CFD.
The trader opens a deal and determines the sale or purchase, the amount he is investing in, the leverage … and other criteria that differ according to the broker.
Actually concluding a contract between the trader and the broker and agree to the opening price of the deal, and see if there are additional fees or not.
The deal opens and is not closed to through the decision of the trader to close it, or if the trader identifies cases in which the deal is automatically closed, such as a loss order or a profit-taking, or in the event that the contract period ends.
In the case of closing the deal on gains, the broker pays the trader, while in the case of closing the deal on the loss, the broker charges the trader a fee.
How to buy Snap shares
One of the most important conditions for subscription is supply and demand and the underwriter, which makes it difficult to obtain the initial price at the time of opening the stock directly, but direct trading of the stock immediately after the offering is available only to companies and financial institutions and not to all traders.
There are a number of steps to follow when purchasing Snapchat shares:
- Determine the amount of your investment in Snapchat, so don’t invest in more than you want to lose.
- Open an account and fill out all the required fields in the form for opening an account.
- Buy stocks using the trading platform.
Advantages of CFD trading
Leverage: It is one of the most important advantages of trading contracts for difference, as by using a small amount you can open large-sized deals compared to owning the asset that is being traded on.
If a specific share price reaches $ 100, you can invest in this share with just $ 50, and by using a 1:10 leverage you can trade on the same stock for $ 500, and in this way you can open deals larger than the value of your balance with the leverage feature.
Possibility of profit from decline: whether market movements are moving up or down, you can benefit, as there are no restrictions at the beginning of the buying or selling process, in the case if you make the first sale and think that prices are low then this is called “short selling” and in this case You can then buy it at a low price and record gains.
Trading a wide range of markets: Most of the CFD brokers offer the possibility to trade on various assets in a wide sector of financial markets around the world through trading platforms directly on the internet, for this diversity in investment tools (stocks, indicators, currency and commodities …) CFDs provide a significant sector for many investment opportunities for all traders.
Lack of government fees: In the case of buying or selling in contracts for differences, this does not require any taxes that are paid such as documentation fees or stamps, and the reason for this is that the trader does not possess the actual assets of what he is trading in, and despite this, the gains The taxes that he obtains from that circulation may be subject to taxes, but this occurs on condition that it reaches a minimum level that is specified according to what is stipulated in the law of the country of residence.
The possibility of trading throughout the day: CFD trading is available 24 hours, five days a week, starting from Monday to Friday, and this makes the investor free to trade at any time he wishes, whether the trader is full-time or a worker, and this is unlike traditional markets, A trader through CFDs can also continue trading even if the main markets are closed.
In the end…
You must have sufficient knowledge and information on how financial derivatives such as contracts for difference and the size of potential gains and losses so you’ll be able to determine if this type of investment is suitable for you.
Why trade in Snapchat stock CFDs with Q8 Trade?
- Use of financial leverage to increase the capital value of your trade.
- You’ll have the opportunity to trade Snap shares and make profits even if there is a decrease in stock prices.
- Trading Snap shares without any fees or stamp duties.
- Variety of trading tools such as real-time graphs, historical prices, realted news updates, live charts, fundamental technical analysis and others that could help you in making wise trading decisions.