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Tonight after the close Snap Inc (SNAP - Free Report) will deliver its first earnings report as a public company.  Needless to say this a big event on Wall Street, and given the amount of shares traded it is probably a big deal on main street too.  Thing is, I saw something literally on the street that made me write this article.

Let’s first take a look at the expectations for Snap (SNAP - Free Report) which is a Zacks Rank #3 (Hold).  Wall Street is looking for revenue of $158.3M and a loss per share of $0.20.  More important than earnings for this stock is the story of DAU (daily average users).  The S-1 noted that the company had 158M daily active users at the end of last year but analysts are looking for 165M daily active users for 1Q.

Average revenue per user or APRU as the analyst call it moved from $0.31 in 2015 to $1.05 in 2016 and investors will be keying on the idea of that metric continuing to grow.

Competition

Twitter (TWTR - Free Report) recently spiked after the CEO bought shares and deal with Bloomberg was announced.  Mark Cuban of Shark Tank fame also announced that he bought some stock. On April 26 the company posted a big beat of $0.10 ahead of the Wall Street estimate and had a solid beat on top too. The company had 328M monthly active users (MAU) which was a 6% increase from the most recent quarter.

Facebook (FB - Free Report) is a Zacks Rank #3 (Hold) but has shown some great growth of late. FB has 1.86B MAU while its Messenger app has 1.2B MAU as does WhatsApp.  Instagram has 600M MAU and recently noted that Instagram stories had over 200M daily active users which was up from 150M in early January.

On April 11 FB noted that it had 5M businesses that are active advertisers on their platform and more telling was that 1M of that was on Instagram.

Moving Forward

So back to the idea of why this article came to be.  It was really an odd coincidence (or was it) that I noted on my Twitter account (@BBolan1) that I liked SNAP for the earnings report and then I saw a rolling billboard.

The small truck that carried a billboard along Wacker in the heart of downtown Chicago crawled down the road and then circled back in front of me.  It felt like it was a sign (forgive the pun) of things to come.

The billboard reads “Half of young adults are took busy watching Facebook mobile videos to see this ad” and looked like this:

No Coincidence

I am not a believer in wild coincidences, especially those coming from big thinkers like Mark Zuckerberg and Sheryl (Lean In) Sandberg.  To have this billboard rolling through downtown Chicago on the day that Snap Inc is reporting earnings for the first time struck me in the opposite way it was intended to.

This feels like a move in desperation.  A reminder that FB has the biggest lead in the social space and that money ultimately follows the eyeballs.  This was true of when MySpace was dominant and is still true now.  Thing is, Snap Inc is the first real competitive threat to Facebook and they know it.

This tells me that Wall Street will be the first to see that Snap is going to start eating into the dominance that is Facebook.  More importantly, it all starts tonight.



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