Revising Snoop Dogg Down
by Mr JugglesLike a company that has expanded outside its core business, Snoop Dogg has overextended himself. He has peaked and is ripe to be shorted.
Snoop Dogg has rebranded himself repeatedly, going as:
- C. Broadus
- Calvin Broadus
- Snoop
- Bigg Snoop Dogg
- Snoop Doggy Dogg
He lacks focus and recently has gone even further afield. He has appeared in advertisements for Chrysler, promoted hot dogs, and performed cameos in multiple movies. He even went so far as to produce his own porno film.
All this means that Snoop Dogg’s returns on incremental capital have been falling rapidly and are much lower than those in his core competency, the writing and production of degrading but catchy gangster rap. Furthermore, his frequent name changes have diluted his core brand.
Recommendation: Short Snoop because his returns are the big double drizzle.
I don’t know jugs. Mind if I call you jugs, by the way? Great.
I’ve heard the “dilution of core brand” argument about Snoop more times than I’ve heard the fake Phish version of Gin & Juice–and I listened to that song a ton in college. Seriously, it was like my favorite song.
What the analysts tend to forget when valuing Snoop is the value of Snoop’s options. Word on the [Wall] street is that he’s got some serious call options on his whole posse. What you see as a dilutive cameo in “Old School”, I see as a value-boosting appearance for one of his hottest assets–Guy With Green Hat. And let’s not forget former-pimp Bishop Don Magic Juan. I’ve heard a rumor he’s leaving the church and going back to pimpin’ full-time. And I’m definitely long on pimpin’.
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You’re right, but he has some good times yet to come, simply for the lack of a proper substitute. I see his recovery somewhere in the road.
Ja Rule is too weak and 50 Cent is overestimated. The Dogg is still the Dogg.
But Ja Rule and 50 Cent compete in the commodity segment of rap where they face low margins and high competition due to the market’s maturity. Snoop formerly would never have had Ja Rule or 50 Cent as a comp — you would have been using people like Jay Z or Grandmaster Flash who were not only innovators but also those who had clear pricing power. It’s clear that Snoop is a former innovator but he hasn’t been allocating enough money to R&D and has concurrently dilluted his brand as outlined above.