Snapchat always looked for me like a game rather than a service sustainable long term. It has a funny functionality playing on fragmentation of children's attention. They don't need history of messages and focus on cool impressions, focus on fun. So Snapchat offered a funny messenger will limited functionality.
But it looks like the fashion for Shapchat didn't have lags big enough, and consumer engagement was not enough to proof the sky rocket valuation of $16 billion. Now looking at the revenue data Fidelity has to recognize that.
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Fidelity Marks Down Value of Snapchat Stake
Mutual-fund group Fidelity Investments reduced its estimated value of its stake in Snapchat by 25% in September, according to regulatory filings. The change was the first by Fidelity since it invested in Snapchat in May at a valuation of $16 billion.
Snapchat renegotiated deals with some Discover partners after the product failed to live up to their expectations around traffic and ad revenue, a person familiar with the matter said in July. Snapchat expects to generate about $50 million in revenue this year, a person familiar with the matter said in August.
It is unclear whether Fidelity marked down its valuation of Snapchat because of a change in the company's performance or a change in broader market conditions, or both.
http://www.wsj.com/articles/fidelity-marks-down-value-of-snapchat-stake-by-25-1447187088
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Here is an earlier article suspecting that Snapchat valuations were too high:
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If This Really Is a Tech Bubble, Snapchat May Be the Best Proof
http://bostinno.streetwise.co/2015/03/12/snapchat-valuation-snapchat-worth-15b-with-new-funding/
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