Despite losing approximately one third of its value after forecasting no revenue growth for the holiday quarter, Snap’s (SNAP) earnings were likely worse than reported. New language in the company’s latest quarterly filing indicates Snap may not be appropriately marking its private assets to market:

“There were no gains or losses recognized on our strategic investments in privately held companies for the three months ended September 30, 2022.”

Marks that reduce the carrying value of private investments must be included in GAAP earnings.

At the end of the latest quarter, Snap had $226.7 million invested in privately held companies. Despite the plunge in technology stocks this year, not only has Snap not marked down the value of its private investments, the company is still reporting gains in the first six months of the year:

“We recognized $19.7 million of unrealized gains and $45.9 million of realized gains on investments in privately held companies for the nine months ended September 30, 2022.”

The unrealized gain is a 9.5% return in a broader market that has lost more than 30% YTD.

It seems a strategic pivot is in order since Snap appears to be a much better investor than an operator of an advertising platform.