2024-01-24 17:55:55 ET
Summary
- Snapchat faces long-term challenges in monetization and competition, particularly from TikTok.
- The user base of Snapchat offers lower monetization potential compared to other social media platforms.
- The high reliance on stock-based compensation at Snapchat raises concerns about the alignment of management with shareholders.
Introduction
I have a confession to make... while I am primarily a long-only investor, from time to time, I will, on occasion, buy out of the money put options on select companies in an attempt to both capitalize on my high-conviction ideas and hedge my portfolio.
I still believe the best way to build long-term wealth is to buy and hold the best stocks over many decades and that, for most people, options and short positions are a waste of time and money. This investment is an exception to that personal rule I've set for myself. As a thought experiment, sometimes I think about what I consider to be the worst businesses....
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Snap: It's A Strong Sell In 2024