Snap, Inc. Has Spent Over $400 Million on Acquisitions This Summer

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Flush with IPO cash, Snap (NYSE: SNAP) has gone on a summer shopping spree.

In June, Snap unveiled a new feature called Snap Map, which allows Snapchatters to track the locations of friends in real time. Many noticed that the feature looked rather familiar and resembled an app made by Zenly. Shortly thereafter, it was reported that Snap had acquired Zenly for an estimated $200 million to $350 million.

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Then there was the acquisition of Placed, which reportedly had a price tag of $125 million to $200 million. Placed allows advertisers to track and measure in-store attribution, essentially helping advertisers figure out if Snapchat ads are translating into foot traffic at retail locations.

Now we know how much Snap actually spent

Following its dismal second-quarter earnings release, Snap has filed its corresponding 10-Q, which includes the official figures. Here's the bit on Zenly:

There was another, smaller acquisition that was not reported, and Snap doesn't specify it by name:

Then the section related to Placed, which actually did not occur until July (contrary to the reports in June):

Since the Placed acquisition closed in July, it was not reflected in the second-quarter financials but will instead be included in third-quarter results. Between those three acquisitions, that's a $410.6 million total price tag. Following its IPO, Snap finished the first quarter with $3.2 billion in cash on the balance sheet, and the company just spent a decent chunk of that cash. Snap closed out the second quarter with $2.8 billion in cash before factoring in the Placed deal.

Snap paid quite a bit for those smaller companies, and as such recorded a fair amount of goodwill since the purchase prices were well above the acquired companies' book values. There was $154.4 million worth of goodwill associated with Zenly, and $24.1 million worth of goodwill for the unnamed acquisition, adding $178.5 million in goodwill combined to the balance sheet. Placed will add even more once Snap is done running the numbers for the deal.

Acquiring companies in order to add features and tools is certainly much faster than developing those features and tools on your own, but Snap is already running up quite a bill, and it's not clear if any of these new features will help address the competitive threats that Snapchat now faces from larger rivals.

Just because you have the money doesn't mean you should go on a shopping spree.

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Evan Niu, CFA has the following options: long January 2019 $20 puts on Snap Inc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.