TIVP051: SNAP INC. (SNAP): WHY HASN’T SNAPCHAT BECOME A SOCIAL MEDIA TITAN?

W/ SHAWN O’MALLEY & DANIEL MAHNCKE

TIVP051: SNAP INC. (SNAP): WHY HASN’T SNAPCHAT BECOME A SOCIAL MEDIA TITAN? W/ SHAWN O’MALLEY & DANIEL MAHNCKE

21 December 2025

Shawn O’Malley and Daniel Mahncke break down Snap Inc. (ticker: SNAP), a camera-based social media app with nearly a billion monthly users globally that’s ubiquitous amongst 13-34 year olds across North America, Europe, and increasingly, the rest of the world.

In this episode, you’ll learn about the origins of Snapchat, why they declined an acquisition offer from Facebook, how they beat Mark Zuckerberg’s clone of the Snapchat app, why the shares have floundered since IPOing in 2018, and whether Snapchat can ever turn things around and profitably compete with Tech Giants. Shawn & Daniel also explore whether SNAP’s stock is attractively priced at current levels, plus so much more!

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IN THIS EPISODE, YOU’LL LEARN:

  • How Snapchat almost didn’t become a hit, and what made it suddenly so popular
  • Why Snapchat, being a founder-led company, is less than ideal in this case
  • Why it has been so much harder for Snapchat to make its unit economics work relative to peers
  • Whether subscriptions can save Snapchat’s business model 
  • What to know about how the company is dipping its toes into artificial intelligence
  • Why growth internationally is actually worsening Snapchat’s unit economics
  • Why Snapchat is unlikely to be acquired any time soon
  • How to think about modeling SNAP’s intrinsic value
  • Whether Shawn and Daniel add SNAP to their Intrinsic Value Portfolio
  • And much, much more!

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:00] Shawn O’Malley: In an age of big tech monopolies, there are some ubiquitous tech giants that we all know, yet they have failed to turn that popularity into compounding shareholder value.

[00:00:10] Daniel Mahncke: Snapchat is maybe the best example of this. Famously going from a company that Facebook offered to buy for $3 billion to being worth a hundred billion dollars for a fleeting moment in 2021.

[00:00:22] Daniel Mahncke: The stock has since down a full circle and now trades at a third of its IPO price with nearly 1 billion monthly users. Is a market underestimating Snap’s power, or are things as bad as they appear?

[00:00:38] Intro: You are listening to The Intrinsic Value Podcast by The Investor’s Podcast Network. Since 2014, with over 180 million downloads, we’ve learned directly from the world’s best investors. Now we are applying those lessons to analyze businesses and investment opportunities every week, helping you uncover intrinsic value. And now here are your hosts, Shawn O’Malley and Daniel Mahncke.

[00:01:10] Daniel Mahncke: Today will be the first time we do an anti pitch on this show, and it’s not because we’ve stopped looking for great companies to add to our portfolio, but because sometimes in the search for intrinsic value, what you think looks promising at first. Quickly becomes a train wreck. There have definitely been some investment ideas that we’ve sold on more quickly than others, like we, for example.

[00:01:31] Daniel Mahncke: But today’s episode will be a masterclass on what to avoid, you might say. So Sean, why don’t you tell the audience about which company we will have the pleasure of tearing into in this episode?

[00:01:43] Shawn O’Malley: So I went deep down the rabbit hole on, on Snapchat, took her SNAP, which most people under 35 will probably be familiar with, I’d say.

[00:01:52] Shawn O’Malley: And, and yeah, I originally was looking at this thinking there, there may be an interesting pitch to be made because if you look at the numbers, they’ve captured less than 2% of the U.S. digital advertising market, despite reaching 75% of people aged 13 to 34 in 25 different countries, including the US of course.

[00:02:12] Shawn O’Malley: And so for the younger millennials and Gen Zs out there, Snapchat is, or at least probably was a significant part of your life for years.

[00:02:22] Daniel Mahncke: Whenever you get the majority of teenagers and young adults, especially in North America, to all use just one app, sometimes 20 times a day or more, you would really think that the company behind that app would be an absolute jugg out exactly.

[00:02:36] Shawn O’Malley: Yet with a roughly $15 billion market cap. Meta is worth about a hundred times more than Snapchat, which is incredible. I mean, sure Snapchat is not Facebook or Instagram, but we’re still talking about a platform with nearly 1 billion monthly active users. I mean, that is one in every eight people globally using Snapchat at least once a month, with the point being just intuitively, Snapchat seems to be either massively, massively undervalued or so poorly run that it’s massively under monetized.

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