papatf

One of the interesting dynamics at $SNAP is the company’s “Aviation Program.” The company leases a jet owned by @evanspiegel . In exchange for a $0 lease, the company (i.e., shareholders) pays for all operating, maintenance, insurance, and property tax costs associated with the aircraft. In addition, Snap Inc. funded the construction of an airplane hangar on land controlled by Evan Spiegel. We have conducted additional research into this “Aviation Program.” Our findings suggest the aircraft may be owned by a trust controlled by Evan Spiegel: The Captain’s Chest Revocable Trust. Further research indicates that this trust may have taken out a loan from Wells Fargo to purchase the aircraft. We identified a publicly available lien in which the trust is listed as the debtor. This same trust has also been used by Evan Spiegel to sell $SNAP stock on a recurring basis via 10b5-1 plans. To our knowledge, the existence of this debt has not been publicly disclosed. This raises additional questions about whether the trust has incurred other debt obligations, and whether those obligations may relate in any way to the recurring Rule 10b5-1 sales of $SNAP stock from the trust. Given that shareholders bear the costs associated with the aircraft, greater disclosure regarding the nature of these arrangements appears warranted. Additionally, $SNAP maintains a “no pledging” policy for its stock, which states: “Our insider trading policy prohibits all employees (including executive officers), members of our board of directors, and consultants from engaging in derivative securities transactions, including hedging, pledging company securities as collateral, holding company securities in a margin account, or engaging in other inherently speculative transactions involving our capital stock.” The fact that a trust holding $SNAP stock is listed as a debtor raises questions about whether it is fully compliant with the company’s “no pledging” policy, which applies to all employees, executive officers, and board members. Further, this raises the question of why a company which is working to become profitable needs to bear the burden of such an extensive "aviation program". In our view, a NetJets membership would be adequate and likely more cost efficient. We wonder whether the Board has done the cost math on Netjets vs. the cost of the "aviation program" as currently structured. CC @jlanzone @JoannaColes @Patrick_Spence