Here is an intriguing, but also, almost an unexplainable thing with the tech startups. There is a mind blowing disproportion between their market value and their profit capacity. Snapchat is definitely among the most obvious examples in this field. This app has reinvented disproportion.
How? Well, for what is worth, the current estimated market value is somewhere around $20 billion. If we are not mistaken, the last time Facebook knocked at Snapchat’s door, we had an offer of almost nine or it was “only” six billion dollars? So, what is happening with the profit side?
Believe it or not, we are talking about only $3 million, not billion, just to make sure. It does not make any sense, does it? Who would pay $20 billion, for something that makes only $3 million a year? Well, you can rest assured that there is quite a long line of potential business bachelors.
Here is the last piece of the puzzle. It does not matter how much money you make as long as investors have a blind faith in your product or service. The Snapchat has more than $300 million in its bank account. So, they can certainly afford to turn down all takeover offers they do not like. Right?