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>> Snap Inc.striking stock market gold Thursday. The parent of Snapchat saw an almost 50% in the most highly anticipated tech market debut since Alibaba. But new investors should be careful, says Reuters breaking news editor in chief Rob Cox, who uses Snapchat's own selfie filters to drive home his point.
>> Well I think the governance structure of Snap is vomitacious. I mean, it looks like rainbow barf, the kinda thing that you put on one of those videos from Snap. You're buying into a company in which you have absolutely no vote. They now are saying, we only have this stock that we're offering you, public investor.
And it means you have no say in the company. You don't get to vote on our compensation, you don't get to vote on who the directors of the company are. If we do some big, gigantic deal that dilutes shareholders, you still don't get a vote on it! I mean, this is something that's never before really been seen in the history of Wall Street.
>> Others are also concerned. Reuters learning that advisors to the SEC will next week review Snap's unprecedented shareholder structure, and probe whether that leads to a lack of transparency. Then, there's the issue of valuation. At $24 billion, it's the richest US tech debut since Facebook went public almost five years ago.
Snap is still losing money, and subscriber growth isn't what it used to be.>> Look at their user growth. They've gone up to 158 million in the fourth quarter from the third quarter. That's actually only a 3% growth rate from quarter to quarter. This is sort of the problem we saw with Twitter, by the way.
You saw growth, but you saw growth rate slowing. And I think given the kind of valuation they're putting on the company, you gotta see more than a 3% sequential growth rate to really be excited by the stock.>> Add to that, what's become a muddled message, instead of focusing on the Snapchat messaging app that made it famous, it's been selling itself as a wearable tech company.
Another thing making it difficult for investors to know how much the company is really worth, no matter how well the stock performs on day one.