Data Sheet—Thursday, May 11, 2017

Snap probably wishes its earnings report, released Wednesday, would disappear.

In fact, the young company has now broken the First Law of IPOs: Don’t blow your first financial report as a public company. It is certain to piss off investors, especially the ones who bought into the dream during your IPO roadshow mere weeks ago.

In the case of Snap, whose Snapchat disappearing messaging platform is popular with youngsters but under attack by Facebook, turning in disappointing results meant not meeting Wall Street’s expectations. Its revenue was on the low side, its user growth was positively Twitter-like (that’s not a good thing), and its losses were astronomic. In fact, Snap lost $2.2 billion in the first quarter, most of which was due to employee compensation costs. (Another no-no: Public investors hate to see a company’s employees, particularly its top management, getting rich when they are losing their shirts.)

It is by no means game over for Snapchat, a clever company whose clever founders captured the zeitgeist once and can do so again. But with a 25% plunge in its stock price in after-hours trading—back to about the $17 a share at which it first sold stock to the public—Snap is now in the penalty box. Its young founders control their company, which was much commented on at the time of Snap’s IPO. And so investors truly have only themselves to blame for their disappointment. Management is no hurry to please anyone other than themselves.

Snap is going to be a wild ride. Public investors need to decide in they plan to go along for it, bumps and all.

Adam Lashinsky
@adamlashinsky
adam_lashinsky@fortune.com

NEWSWORTHY

Snap sapped. As Adam discussed in his essay today, teen messaging sensation Snap reported its first quarterly results as a public company, and Wall Street said ugh.

Overrunning the runway. The bidding war over tiny 5G spectrum rights owner Straight Path Communications slammed to a halt last night when AT&T declined to top Verizon's $184-per-share bid. Only one problem: Straight Path's stock closed at almost $224 on Wednesday.

Bring a book. The Trump administration is likely to extend its ban on passengers using laptops on airplanes to cover flights from some European countries. The ban already covers flights departing from 10 airports in Middle Eastern countries, such as Saudi Arabia and Qatar.

Not the last unicorn. Clover Health, a data-driven insurance startup, raised at least $130 million of venture capital in a deal valuing the company at $1.2 billion.

Corporate computing. Microsoft's first day of its annual Build conference focused tightly on the needs of big customers, with news about artificial intelligence projects and databases. Oh, and by the way, 500 million devices are running Windows 10 so far. Fear not, more fun stuff will likely be discussed on Thursday like Xbox, Windows, or perhaps the Surface line up.

Faster, faster, faster. Speaking of AI, graphics chip leader Nvidia introduced its newest line, dubbed Volta, aimed initially not at gamers, but at data centers running machine learning and other AI-ish apps. The first chip in the Volta line, the Tesla V100, has a staggering 21 billion transistors powering 5,129 processing cores.

FOOD FOR THOUGHT

Imagination fuels great art, but it's also required in many other fields. Say, the military.

At the Army Cyber Institute at West Point, a newly created think tank, researchers are spinning up science fiction scenarios that may guide planning for future threats in a process they've dubbed "threatcasting."

"When you think about where we could be 10 years from now, most people don't think that we will have cyborg soldiers, but we may," Colonel Andrew Hall, director of the institute, tells CNET. "We definitely have to think about it before we can even count on it happening or discount it."

BEFORE YOU GO

The right kind of distraction can spur a creative thought or a new approach to a knotty problem. A new add-in for the Chrome browser called 100 million books displays a thought-stimulating book quotation whenever a new blank tab is opened. Think about that.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.

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