"the company has estimated that revenues will be between $250 million and $350 million for 2016, and between $500 million and as much as $1 billion for 2017."
Incorporating your numbers, what I see is a business that is plausibly on a path to grow from $3m to $1b in revenue (~30,000% growth) in 3 years.
If you an investor targeting growth companies and you pass on an opportunity like this, you should be fired. Snapchat isn't General Mills, and it should not be valued using the same approach.
1) Investors in growth companies care about what's next, not what's past. The past numbers are important to lend credibility to projections, but nobody values growth companies based on (presumably much smaller) numbers from the past.
2) Also from TFA: "Snapchat’s revenues in 2015 were $59 million (recall that there was no real monetization effort in the first part of the year, and only the beginnings of it in the latter part of the year)."
I'm not privy to any internals at Snapchat, but based on the other metrics in the article, the projections are not implausible at all. But yeah, it's still not appropriate for people whose idea of risk is owning Procter & Gamble.
"the company has estimated that revenues will be between $250 million and $350 million for 2016, and between $500 million and as much as $1 billion for 2017."
Incorporating your numbers, what I see is a business that is plausibly on a path to grow from $3m to $1b in revenue (~30,000% growth) in 3 years.
If you an investor targeting growth companies and you pass on an opportunity like this, you should be fired. Snapchat isn't General Mills, and it should not be valued using the same approach.