While your assessment is fundamentally correct, you are missing one simple thing: The question is not whether it ever had an income, but what the value is of the assets held by the company.

Example: Every year you spend $10k more than you earn. Are you bankrupt? Well, you own a couple of hectare of land that you can sell for millions. Have fun spending your money!

Example 1: I give you an account with $100k. You take out $1000 per year for 5 years. You still have positive equity despite never making any money.

In case of Snap Inc - same basic accounting principle. Equity is assets - liabilities. So, Snap Inc still has equity by simply having more assets than liabilities. One way is by doing a large IPO and taking in a TON of investor money that still is not used up.

Let's have a look at the stock chart. This is a nice income statement, but it is NOT A BALANCE SHEET. If you look at the balance sheet you see it has a TON of equity, TON of invested capital, heck, and still a ton of working capital. Here are the hectares of land (i.e. the asset worth a LOT) and the accumulated debt is not large enough to completely offset those.

While your assessment is fundamentally correct, you are missing one simple thing: The question is not whether it ever had an income, but what the value is of the assets held by the company.

Example 1: Every year you spend $10k more than you earn. Are you bankrupt? Well, you own a couple of hectare of land that you can sell for millions. Have fun spending your money!

Example 2: I give you an account with $100k. You take out $1000 per year for 5 years. You still have positive equity despite never making any money.

In case of Snap Inc - same basic accounting principle. Equity is assets - liabilities. So, Snap Inc still has equity by simply having more assets than liabilities. One way is by doing a large IPO and taking in a TON of investor money that still is not used up.

Let's have a look at the stock chart. This is a nice income statement, but it is NOT A BALANCE SHEET. If you look at the balance sheet you see it has a TON of equity, TON of invested capital, heck, and still a ton of working capital. Here are the hectares of land (i.e. the asset worth a LOT) and the accumulated debt is not large enough to completely offset those.

While your assessment is fundamentally correct, you totally miss a simple thing: The question is not whether it ever had an income, but how much it holds as assets that are worth.

Example: You spend every year 10k USD More than you earn. Are you bankrupt? Well, you own a couple of hectar of land that you can sell for millions. Have fun spending.

Example 1: I give you an account with 100k USD. You take out 1000 per year for 5 years. How can it be there is money on the account when you never pay in?

In case of Snap Inc - some basic accounting principle. Equity is assets - liability. So, how can it have more assets than liability when it accumulated a deficit? BY HAVING MORE ASSETS. I.e. by doing a large IPO and taking in a TON of investor money that still is not used up.

Let's have a look: https://finance.yahoo.com/quote/SNAP/financials?p=SNAP is a nice income statement. it is NOT A BALANCE SHEET. If you look at the balance sheet you see it has a TON of equity, TON of invested capital, heck, and still a ton of working capital. Here are the hectars of land (i.e. the asset worth a LOT) and the accumulated debt is not offsetting those.

While your assessment is fundamentally correct, you are missing one simple thing: The question is not whether it ever had an income, but what the value is of the assets held by the company.

Example: Every year you spend $10k more than you earn. Are you bankrupt? Well, you own a couple of hectare of land that you can sell for millions. Have fun spending your money!

Example 1: I give you an account with $100k. You take out $1000 per year for 5 years. You still have positive equity despite never making any money.

In case of Snap Inc - same basic accounting principle. Equity is assets - liabilities. So, Snap Inc still has equity by simply having more assets than liabilities. One way is by doing a large IPO and taking in a TON of investor money that still is not used up.

Let's have a look at the stock chart. This is a nice income statement, but it is NOT A BALANCE SHEET. If you look at the balance sheet you see it has a TON of equity, TON of invested capital, heck, and still a ton of working capital. Here are the hectares of land (i.e. the asset worth a LOT) and the accumulated debt is not large enough to completely offset those.