You can study economics, but you will probably never really understand it.
What many great thinkers have been constantly repeating for centuries, of course in constantly updated form, can currently be observed again in the United States. Because there, a 28-year-old Internet entrepreneur has received the highest compensation ever paid to a CEO. Even his company is deeply in the red.
Can Snapchat make money?
Most conventional investors who own shares of the instant messaging service can only smile tiredly at this question, because so far Snapchat writes nothing but losses. Even they were lower last year, than experts and the parent company Snap Inc. had expected. Nevertheless, it can not be glossed over: The loss of the company in the last quarter of 2017 alone was $ 350 million. That Evan Spiegel, founder and CEO of Snap, can still look forward to a payout of $ 637.8 million for 2017, seems to completely disagree with common sense. Notably, given that his base salary was only $ 98,000, while the rest of his income was made up of stock-based compensation components. Even professionals have a hard time understanding this system: it’s like an airline rewarding the pilot who deliberately crashed his plane.
What’s next with Snapchat?
Obviously, investors continue to have confidence in the company’s recipe for success, which is suffering greatly from the competitive pressures of its competitor Instagram. In any case, mass sales of Snap papers on the stock exchanges have not been observed so far. Nevertheless, the market is extremely sensitive, as one recent example impressively shows: According to a tweet by Kylie Jenner, half sister of television star Kim Kardashian, the price of the Snap share crashed temporarily in mid-February by around 8 percent, which is a loss of about $ 1.7 billion. The content of the tweet, however, was trivial: In a rhetorical question Jenner said that she no longer wanted to use Snapchat due to the new design of the app. It is noteworthy that the statement of a reality TV participant received much more attention than the Citigroup’s analysis published at the same time. The company advised to sell the shares of Snap.
So there is enough work for Evan Spiegel. Now he can prove that he is worth his money and can get the machine back on track – to stay with the metaphor of the plane crash.