M&S is now worth more than Snapchat
Here’s an interesting stock chart comparison that caught my eye this week.
For the first time, the market cap of Snapchat owner Snap is now less than supermarket M&S, in a sharp reversal of the tech firm’s fortunes.
If you’d spent £1,000 on shares in the social media platform five years ago, you’d be left with about £85 today after the stock fell by more than 90 per cent.
Alternatively, if you’d put that cash into shares of the 140-year old British retailer, today you’d have nearly £3,000.
Buzzy tech stocks, even if they float on a market cap of near $100bn, as Snap did, are not guaranteed success. In Snap’s case, it has wrestled with the twin rivals of Meta’s Instagram and Bytedance’s Tiktok, which have adopted a similar vertical video format to Snapchat and poached millions of its users in the process.
M&S, by contrast, has built up solid fundamentals in a fiercely competitive supermarket industry, with the stock shrugging off a painful cyberattack to recover to its highest point in around a decade. The shares are already up by around a fifth since the start of the year.
Weighing up M&S with Snap is a very apples-and-pears comparison, granted. But I could have picked a range of alternatives. Another tech firm now worth less than M&S is Klarna, which has already seen a more than halving of its share price since its September float.
And as we’ve seen this week, many software-based businesses are under pressure from the threat of AI, with the likes of RELX, Money Supermarket and Sage all tumbling since the start of the year.
Sometimes, good old fashioned bricks and mortar businesses do stand the test of time.