SNAP: Where Are The Adults? — Beehiiv Copy Test

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— 3 min read
SNAP: Where Are The Adults? — Beehiiv Copy Test

Beehiiv copy test

Fix the incentives, triple the stock price

By Travis Devitt · February 19, 2026

Snapchat (ticker: SNAP) is the eighth largest social media platform in the world, boasting nearly a BILLION monthly active users (946 million to be exact).

The company has grown annual revenue from $100 million to almost $6 billion in the last decade.

Despite those impressive stats, the stock has delivered an abysmal performance since its 2017 IPO, falling by 80% and over 50% in the past year alone:

There are many reasons investors have abandoned the company’s stock, including:

  • Larger social media peers have grown faster, as advertiser dollars continue to concentrate on a few large platforms such as Meta & Google
  • SNAP’s user base skews young, making monetization more difficult
  • SNAP struggled to generate positive free cash flow for most of its history
  • SNAP has invested in side projects that have failed to deliver returns
  • SNAP’s valuation has rarely been cheap
  • SNAP’s founder CEO Evan Spiegel maintains super-majority voting powers
  • SNAP’s shareholders have been diluted heavily by executive & employee stock grants

Most of those reasons are valid but also backward looking.

SNAP is now generating rapid revenue growth from subscription products like Snap+ and photo/video storage, and free cash flows are positive and growing over the past year.

Sentiment is washed out with the stock at an RSI below 20 and valuation now looks downright cheap:

SNAP recently announced a new subscription service for creators that could become a rival to OnlyFans if they are successful.

SNAP is also introducing a new version of their AR glasses this year that they believe can fundamentally change how people use AI in their daily lives.

Those are call options on growth that the market is giving zero credit for today.

All of these factors point to a contrarian value / turnaround setup in SNAP stock, with multibagger upside potential.

However, there is still one massive issue that’s keeping SNAP permanently in the penalty box.

The Glaring Governance Problem

It’s not uncommon to see founder CEOs of public companies retain supervoting rights.

Unlike SNAP though, those other companies have generated tremendous returns for shareholders. With SNAP, shareholders have no ability to hold management accountable for value destruction.

There’s an even worse problem for SNAP shareholders: excessive stock based compensation.

  • 2023: 148.7 million RSUs granted
  • 2024: 89.2 million RSUs granted
  • 2025: 175.2 million RSUs granted

Stock compensation in 2025 alone represented more than 10% of the entire company’s outstanding shares.

Shareholders cannot participate in any meaningful upside until SNAP management stops this brazen theft.

Envisioning The Opportunity

Success in investing comes from correctly positioning for the future rather than the past. We see the potential for SNAP to make needed changes and rise from the ashes.

The stock is sitting near all time lows despite progress in subscriptions, AI partnerships, improving profit margins, and a nearing launch of new AR glasses.

If governance and capital allocation improve, SNAP’s valuation metrics appear quite cheap.

The Trade

We purchased some SNAP common stock recently as well as some long term SNAP call options expiring in 2027 and 2028.

With the right combo of catalysts we believe the stock can triple within two years in a moderate bull case.

Potential future catalysts include cuts to stock comp, insider buying, stronger revenue growth, AI partnerships, and activist pressure on management.

As always, you must decide what makes sense for your situation and risk tolerance.

Disclaimer

Full disclosure: We own a position in SNAP shares and call options. This is not financial advice. Investing involves risk, and you should make your own decisions based on your circumstances.

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