I can only agree - SnapChat can not be worth $30 billion

I have never seen eye to eye with regular Globe and Mail columnist Margaret Wente. Not to put too fine a point on it, I find her elitist, overbearing and self-serving, and her columns are often poorly-argued, poorly-researched and overly-reliant on cherry-picked statistics or reports. So, when I find myself agreeing with her, I get worried. But such is the case with her article today about the Snap Inc. IPO.
Snap Inc. is the company behind the popular social media service SnapChat, a far-from-revolutionary app for those youngsters who think that Facebook is old hat (it is), who can't be bothered to type much, and who don't want a permanent record of their ill-advised and inappropriate postings doing the rounds of the Internet until Kingdom Come.
The company went public this week with an Initial Public Offering (IPO) of its shares on the stock exchanges. Like so many tech IPOs, initial demand for the shares was brisk to put it mildly, exacerbated by the deliberate rationing of shares available in the issue, despite the fact that they carry no voting rights. Snap's share value immediately shot up by 44%, and some investors (including the two 20-something-year-old founders of the company) made, and are making, out like bandits.
The company is now apparently worth around $30 billion, even though its revenues were just $405 million last year, and it made an overall loss of $515 million. Indeed, the company itself warns that "we may never achieve or maintain profitability". So, clearly, this has little to do with financial acumen, and much more with artificially-created demand and mass hysteria. In essence, it can only be described as a bubble, and you know what happens to those...
So, when the teens and twenty-something's that are the mainstay of SnapChat's market latch onto next year's thing, and SnapChat becomes as uncool as Facebook is now, where will we be then? Well, as is usually the case, some savvy investors will have cashed in their profits (having made something out of what was quite clearly nothing), and have moved on to something better; others, not so savvy (including a bunch of millennials for whom Snap may have been their first flirtation with the stock market) will have lost their shirts; still others will merely shake their heads in resignation, and content themselves with thinking but not saying "I told you so".