Snap Inc. SNAP
SNAP is the cheapest social stock at 3x sales with 21% short interest, dominant teen mindshare and Tencent backing — upside to $17 as shorts cover.
Thesis
Citron — famous as a short-seller — takes the contrarian long view on Snap Inc., arguing the shorts have overstayed after a 50% four-month drawdown. SNAP now trades at 3.4x 2021 sales versus Facebook's 5.0x and Twitter's 6.0x, a full reversal of its IPO-era premium. With 21% of float short (vs 4.7% TWTR, 1.2% FB), 191 million DAU valued at just $63 per DAU against FB's $345, and the strongest teen mindshare at 45% favorite (vs Instagram 26%), the setup is asymmetric. Catalysts include the reversed redesign, Tencent's strategic stake, a new Amazon-veteran CFO, 575% ad-impression growth, the absence of any privacy scandal, and acquisition optionality from Google or Apple (GOOG reportedly offered $30bn in 2016). Citron targets $17 — roughly 30%+ upside — betting one stabilizing quarter triggers a squeeze.
SCQA
Snap Inc. operates Snapchat, the most-loved social app among U.S. teens with 191 million DAU, but the stock has fallen ~50% over four months after a botched redesign, a weak quarter and a mocked earnings call.
Shorts have piled in at 21% of float — near-record 110M shares — pushing SNAP to its largest-ever peer discount, while ignoring the reversed redesign, Tencent backing, Gen Z mindshare and absence of any privacy scandal.
Go long SNAP as a contrarian reversal: the short positioning is overdone, any stabilizing quarter forces a cover, and acquisition optionality from Google or Apple backstops the downside.
Target price $17, roughly 30%+ upside — more than any FANG stock — with Facebook's per-DAU valuation implying SNAP could ultimately be worth 5-6x its current equity value.
The three reasons
- 1
SNAP trades at largest-ever peer discount: 3.4x 2021 sales vs FB 5.0x, TWTR 6.0x
- 2
FB valued at $345/DAU vs SNAP at $63/DAU implies 5-6x upside
- 3
21% short interest + Gen Z mindshare + Tencent backing = coiled short squeeze
Primary demands
- Cover SNAP shorts; Citron initiates long coverage with $17 target price
- Recognize SNAP as a relative-value play vs. FB and TWTR on EV/Sales and EV/DAU
- Anticipate potential acquisition by Google or Apple
KPIs cited
Pattern membership
Precedents cited
- Google's reported 2016 offer to acquire Snap for at least $30bn
Composition what's on the 7 slides
Slide gallery ·
Notes
Atypical for Citron: this is a contrarian LONG initiation on SNAP, not a short report — Citron tells shorts they have 'overstayed their welcome' and sets a $17 target. Hence thesis_types = undervaluation/multiple_rerating rather than fraud_exposure. Form is a Word-style research memo with embedded Bloomberg/Statista/BI Intelligence charts and many outbound hyperlinks — closer to a blog post than a slide deck. SCQA is strong (S: SNAP down 50%, C: shorts piled in at record levels, Q: is the negativity overdone?, A: yes — multiple rerating + acquisition optionality). Argues via valuation gap, EV/DAU comparison, teen-mindshare moat, and Google/Apple takeout call-option. Casual pop-culture register (Kardashian/Jenner references, 'damn compelling') rather than typical analytical short-report voice. Visuals are screenshots of third-party charts — functional, not designed. Useful specimen for: short-squeeze thesis structure, 'crowd is wrong' framing, EV/DAU as single-number argument, and pop-culture rhetoric in finance.