An investment in Snap (NYSE:SNAP) by an unexpected source — a Saudi prince — has attracted the Street’s interest recently. However, despite this catalyst, SNAP stock has weakened as a larger competitor, namely Facebook (NASDAQ:FB), has co-opted most of Snapchat’s features.

Nevertheless, some investors still believe in SNAP stock. It rose 10% after the company reported its second-quarter results. But despite the rally by Snap Inc. stock, SNAP has no moat and a falling user base, and is expected to lose money for many years to come, so investors should unload SNAP stock.

SNAP Stock Attracted an Unlikely Investor

Earlier this month, we learned that Saudi Prince Alwaleed bin Talal had acquired a 2.3% stake in Snap Inc. stock. Alwaleed, who is sometimes called the “Warren Buffett of Saudi Arabia,” earned fame by purchasing a large percentage of Citigroup (NYSE:C) in the 1990s when its stock became distressed.

Put simply, I fail to understand what Alwaleed sees. Both Snap and Twitter (NYSE:TWTR) play a subordinate role to Facebook, and in some respects, to Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG). Twitter has found success in certain niches by turning what could be a weakness into a strength. Specifically, the platform’s character limit has become a strength because it forces users to avoid straying from their main points.

Snap Is Closer to MySpace Than to Twitter

Unfortunately for Snap, Facebook was able to copy Snapchat’s most compelling feature when it, too, enabled users to make their stories disappear. In my view, Facebook’s move eliminated most of Snap’s reason for existing. Snapchat has carved out another niche with its filters, which enable its users to add “accessories and special effects” to their selfies, according to The Telegraph. However, I fail to see how filters will help SNAP stock.

To Snap’s credit, its revenue jumped 44.4% year-over-year last quarter. Sadly, that was the only true positive aspect of its results. Yes, its earnings beat expectations, but its string of quarterly losses continued. Even the most optimistic forecasts predict that it will continue to lose money through at least 2021.

Most of my InvestorPlace colleagues agree. The most intriguing analysis came from Vince Martin, who asked whether Snap was the next MySpace. That could end up becoming optimistic. MySpace still exists and claimed 15 million monthly active users (MAUs) as late as 2016. Although no one can invest in MySpace, some music fans still remain devoted to it. The website also attracts other users who are interested in viewing content from the past. Conversely, Snapchat’s disappearing posts and pictures will prevent it from attracting nostalgic users.

For now, Snapchat still has 188 million MAUs. As our own Josh Enomoto pointed out, young people do not stay young. As they age, most will move on to different sites. I would also point out that young people generally do not have the highest incomes. While SNAP stock could tap into the limited purchasing power of its audience, the key word there is “limited.”

Enomoto also warns against shorting this stock. I have to agree, but only because the timing of SNAP’s decline remains unpredictable. Eventually, I think that SNAP stock will head toward penny-stock status. The only question is when that will happen. Based on its current multiple, SNAP stock has a valuation of around $15 billion. However, it lacks a moat, and the company has failed to branch out beyond the Snapchat site. Given these factors, I do not see how Snap Inc. stock will maintain a market cap of $15 billion.

Final Thoughts on SNAP Stock

Investors should stay away from Snap Inc. stock at its current valuation. Admittedly, seeing a Saudi prince with a strong track record buy this stock does spark my curiosity. Still, the motivation behind his transaction remains a mystery. Since Facebook has co-opted one of Snapchat’s most appealing features, the latter website lacks an obvious protective moat. Also hurting the stock are the limits of its young users. Most Snapchat users are young, fickle, and earn little income.

The company has failed to attract a broader audience. It has also not created any successful offerings other than Snapchat. Given all of these factors, and the fact that the company is expected to lose money for years to come, investors should not expect to profit from SNAP stock.

As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting.