Friday, May 12, 2017

In Snap Inc.’s Tumble, Start-Ups See a Warning From Wall Street - The New York Times

A rough day for Snap
"This year was supposed to be one in which technology start-ups would easily go public. Silicon Valley had boomed in recent years with a collection of rapidly growing companies that were highly valued by private investors, and many of those companies appeared ready to graduate onto public stock exchanges. Snap, the parent company of the messaging app Snapchat, was exhibit A in that trend — a hip social media service that went public in March in the biggest tech offering in several years. 
But on Wednesday, Snap issued its disappointing earnings, sending the company’s stock down more than 21 percent on Thursday. The virulent market reaction turned Snap into a cautionary tale for venture capitalists and start-up entrepreneurs, some of whom are now reassessing the prospects for their companies’ going public and how prepared those companies really are to deal with the aftermath — especially if the start-ups, like Snap, are deeply unprofitable."
In Snap Inc.’s Tumble, Start-Ups See a Warning From Wall Street - The New York Times
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