Dear Snapchat: Don’t Pull A Donald Trump, Release Your Historic Engagement Metrics

Just as large numbers of people believe that Donald Trump should release his taxes so the world can get a better picture of his financial situation, I believe that Snap should release historical engagement metrics, so investors can get a better picture of Snap’s situation, as a business. I assume Trump would release his taxes if they revealed a positive narrative about his financial situation. I similarly believe Snap would reveal its historical engagement metrics if it were beneficial to its IPO. Below is some context for this view.

The Facebook Lesson

In March of 2010 I wrote a research report on Facebook valuing the company at $50 billion. Facebook was trading in the private markets at a $16 billion valuation at the time. The report garnered a good deal of press (most of it derisive).

My valuation was based on a simplistic six year financial model. The company wouldn’t talk to me. But there was enough publicly available information that I was able to estimate Facebook’s revenue and model it out for the next six years.

As it turned out, my 2014 revenue estimate for Facebook, estimated by me in 2010, was $12.33 billion, which ended up underestimating Facebook’s actual 2014 revenue (of $12.45 billion) by just 1%. How did that I got that close? Well luck was involved. But the simple math I use for projecting the revenue of any traditional or digital media company is:

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