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Data Sheet—Thursday, March 30, 2017

Monday was a great day to be Snap Inc. That’s when the brokerage firms that underwrote its IPO were released from their quiet period, and presto! All of them coincidentally came out with strong buy recommendations, which boosted the stock by about 10%.

The warm glow of all those “buy” ratings soon faded, however. Why? Because Facebook announced new features on Tuesday that duplicated most of the popular aspects of Snapchat, the company’s flagship product. Facebook has more than 10 times as many users, and a market cap that is 10 times as large.

Shares of Snap tumbled in response, not surprisingly, because competition from Facebook is one of the biggest shadows hanging over the stock. But there are others, as Pivotal Research notes: It rates the stock a “sell,” with a target of just $10.

Snap’s revenue is expected to climb by as much as 160% this year, to about $800 million. But even that number is smaller than expected, because of higher revenue-sharing with partners. Is that going to be a trend? Snap isn’t saying, but it could curb growth expectations.

On top of that, Snap isn’t expected to be cash-flow positive until 2020, and that’s the forecast from a relatively bullish research firm. That’s a long time to wait for proof that the company’s business model is sound.

Meanwhile, investors are paying more than 20 times Snap’s projected revenues, which is more than twice what Facebook is selling for, and Facebook is a massive cash-generating machine with a proven track record. Snap didn’t produce any revenue until 2014.

Those kinds of multiples are going to be difficult to live up to. And if Snap doesn’t manage to do so, better look out below.

Mathew Ingram
@mathewi
mathew.ingram@fortune.com

BITS AND BYTES

Dropbox is borrowing more money. The cloud storage software upstart, which could go public by the end of 2017, is opening a $600 million credit line to replace a smaller one that is expiring soon, reports Bloomberg. The money would allow Dropbox to fund expansion initiatives, including potential acquisitions, while remaining cash-flow positive. (Bloomberg)

Newsflash: Robots are already eliminating human jobs. New data from the National Bureau of Economic Research suggests for every one of them deployed in a manufacturing or industrial facility, the jobs of six people are eliminated. (Recode, Fortune)

Angry Toshiba shareholders approve sale of the prized chip division. The conglomerate hopes to raise at least $9 billion by selling the flash memory business, in a bid to cover billions of dollars in losses racked up by the Westinghouse nuclear operation. (Reuters)

A tale of two online food-delivery startups. Word is that meal kit specialist Blue Apron has hired bankers for an initial public offering. But things apparently aren’t going well at Munchery, which is recapitalizing and cutting staff to help stay afloat. (Reuters, Bloomberg)

Tongues are wagging over this pet-tech merger. Two Internet startups focused on services such as pet sitting and dog walking, Rover and DogVacay, are joining forces. (Fortune)

THE DOWNLOAD

Here are some highlights from Samsung’s launch extravaganza. The South Korean electronics giant has a lot riding on its latest smartphone, the Galaxy S8, which debuted on Wednesday.

As expected, the gadget has a whole new design—notably, a curved screen, slimmer profile, and personal assistant software that goes by the name of Bixby. T-Mobile is gambling big, with additional features that will help the smartphone achieve near-gigabit download speeds on its wireless network. Here’s where you can get the best deal if you’re willing to forget about the recall debacle surrounding this product’s predecessor. Plus, Samsung is courting corporate buyers with a new docking station that theoretically turns the Galaxy S8 into a desktop computer.

Lest you’ve forgotten, Samsung is hawking virtual reality headsets with some help from the Facebook Oculus team. How “real” does the experience feel? Just ask this ostrich.

IN CASE YOU MISSED IT

Here’s What LinkedIn Could Mean for the Microsoft Cloud, by Barb Darrow

The World’s 6 Weirdest Data Centers, by Jonathan Vanian

Here’s Why Facebook and Google Can’t Fix the Fake News Problem, by Mathew Ingram

How the Architect of the First Apple Stores Got Started, by Dinah Eng

Privacy Advocates Decry Vote to Repeal Consumer Protections, by Aaron Pressman

This Could Be a Golden Opportunity to Buy Apple Stock, by Jeff Bukhari

For BuzzFeed, Going Public Could Be Risky, by Mathew Ingram

ONE MORE THING

About those weird headphones the San Francisco Giants baseball players are wearing. The new training ritual uses technology from Halo Neuroscience to “stimulate” their brains—the theory is that this will allow the athletes to perform at a higher level. Basically, it could improve muscle memory. (Fortune)

This edition of Data Sheet was curated by Heather Clancy.
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