Tesla and Snapchat Might Just Be up for Sale: Who Are the Likely Giants to Purchase Them?
Things aren’t looking too bright for Snap as the 5th largest social media app is on the verge of being sold to…you guessed it, the likes of WhatsApp, Facebook, Messenger, and Instagram. In fact, they might just be squaring off to see who will have a piece of Snap’s pie.
The Fall of Snapchat
As a matter of fact, the downward spiral of Snap can be traced back to 2015, when Instagram created an exact clone of the ‘camera’ company.
By the third month of the launch of Instagram Stories, the new player in the camera scene had recorded as many users as Snapchat. With time, Snapchat’s growth has stalled significantly, with its growth dropping to single digits.
On the other hand, Snapchat’s growth for every quarter had been about 33%.
What’s even sadder is that Snap provide Instagram with the blueprint that led it to be one of the most successful messaging apps worldwide, only playing second fiddle to the likes of WeChat, Messenger, and WhatsApp.
Currently, Instagram has twice the number of users as compared to Snap.
It’s only a matter of time for Snap’s inevitable demise. Experts believe that the company might be quartered, drawn, and disemboweled by its fellow giants, with the likes of Facebook hot on its tail.
This is a prime example of why the monopolistic setup is a disaster in the making, and some experts believe that the Justice Department should move in swiftly and prevent Facebook from buying Snap.
In fact, one can argue that Snap was one of the best firms that created confidence in the startup scene, providing a strong incentive in the belief on entrepreneurship programs.
Declining Customer Data Base
Snap’s customer data has gone from bad to terrible since its decline, reminiscent of the MySpace affair. So it’s only logical that Snap is bound to be sold. However, because of the company’s massive dip in value, buying the company seems like a bad investment. This is proving a nightmare for investors and shareholders alike. So what is the most logical approach that the company might take?
That would be to have a look at the buyers that have come forward. Though the number is pretty small in terms of candidates, buyers looking to purchase Snap would have to come with at least an $8 to $10 billion investment to a company that not only experienced a massive decline in user base the previous quarter, but also lost a lot of money in the process.
That being said, the most likely company is Amazon. In fact, the Seattle based firm announced itself as the front-runner, detailing how they have a deal in the making with Snap to create a Snap filter that will ID a particular product and immediately take you to that given page on Amazon.
Additionally, the fact that Snapchat’s current CFO was initially from Amazon, where he was the company’s vice president of Finance, is another convincing factor.
The Demise of Tesla
As for Tesla, a series of lawsuits coupled with a competitive market in the auto industry (which happens to be a low margin business) might eventually lead to its selling off.
Additionally, the fact that Tesla lacks a steady, sales, distribution, and production network is one highlighting factor. Most, if not all, traditional manufacturers have invested heavily in such areas in contrast to Tesla.
Moreover, the fact that the company has been struggling to meet its Tesla 3 predictions for each quarter is also another worrying factor.
Then the recent debacle where Tesla and Musk faced charges by the SEC regarding the misleading information to privatize the company has only made matters worse for the company and Musk in terms of PR.
Perhaps it’s high time Musk considers selling Tesla? The most plausible buyers would be the likes of Ford, Chrysler, and GM.
That being said, Apple could also be in the running to purchase the electric car manufacturing company, though experts highly doubt it.
Taking a look at any of the traditional auto manufacturers, it would be a smart investment for them considering the fact these companies could easily transform some of their factories into Tesla plants.
However, the biggest hurdle for these companies to purchase Tesla would be its high market value, which is much significantly higher than most traditional car companies have.
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