Transaction

  • Buy 1: May 31, 2022 at ~$14.5
  • Buy 2: Jul 20, 2022 at ~$10
  • Sell: Dec 12, 2025 at ~$7.5
  • Average purchase price: ~$13
  • ROI: –40% over ~3.5 years

Why I Entered

In 2022, Snap looked like a typical growth story: rising user numbers, digital advertising riding a wave, a young target demographic. I believed that monetization would eventually kick in and profitability would improve.

In hindsight, this was a classic “buy the story” trade – the narrative was compelling, but the fundamentals were a disaster.

What Went Wrong

First: macro. 2022 was the year of rate hikes and capital flight from tech. Growth stock valuations were getting crushed. My timing was terrible – I was buying into a downtrend, not a bottom.

Second: competition. Meta and TikTok were eating Snap’s lunch on every front – users, ad budgets, attention. Snap didn’t have a strong enough moat to defend itself.

Third: the business itself turned out to be fragile. Financial results were unstable, dependent on the advertising cycle, with no sustainable margins. For years, there was no clear breakthrough.

Why I Only Sold Now

Mostly due to stubbornness and the belief that “it will rebound eventually.” I held on too long, hoping for a miracle. Instead of cutting my loss after the first year, I waited for the stock to return to the $10–12 range. It never did.

I made the decision when I realized that:

  • the investment thesis had failed,
  • the capital was locked up to no avail,
  • better opportunities existed elsewhere,
  • the company could trade at this valuation for years to come.

What I Learned

  • Macro matters – ignoring interest rates and the broader climate is a fundamental mistake.
  • Narrative without results isn’t enough – popularity doesn’t equal a sustainable competitive advantage.
  • Cutting losses isn’t a failure – it’s capital management. I should have done it much sooner.
  • Opportunity cost is real – that money could have been working elsewhere for 3.5 years.

Summary

I bought the story, I sold the reality. The SNAP investment was a tough lesson that even a cheap company with potential can be a trap if it lacks a competitive moat and a supportive macro environment.

That said, the company will remain on my watchlist in the coming years. The amount of data they gather on users is insane. It may turn out that for someone, that data will be worth more than the company’s mediocre market cap…