China's Tencent Acquires 12% Of Snapchat Maker Snap

Advertisement
Advertisement

China's investment giant Tencent acquired approximately 12 percent of Snapchat maker Snap, the latter revealed as part of its latest filing with the United States Securities and Exchange Commission. The stake in the social media company was acquired by Tencent with the purchase of 145,778,246 of Snap's non-voting Class A shares, with this specific stock category not being as heavily regulated, meaning that should Tencent choose to sell it, the SEC may not necessarily be notified about such a turn of events.

The move is still seen as a win for snap Snap whose stock has been plummeting following the publication of its consolidated financial report for the third quarter of the year, its third one ever and the third consecutive one that disappointed investors with underwhelming performance across the board, from slow user growth to increasing losses. Tencent already invested in Snapchat as part of its $60 billion Series B funding round in 2013, with the Chinese entertainment giant being described as someone that "inspired" the Venice, Los Angeles-based social media company in its latest SEC filing. The timing of the disclosure of Tencent's new investment came in the aftermath of Snap's Tuesday financials, essentially punishing short-sellers betting on the firm's stock going down even further, though such investors are still understood to have made some profit from their activities.

The overall state of Snap is still far from positive, with the firm seeing around a fifth of its market value erased in after-hours trading on Tuesday and its co-founder and Chief Executive Officer Evan Spiegel admitting that many users find Snapchat difficult to navigate, in addition to disclosing a $40 million write-down on its unsold Spectacles, yet another failure that was supposed to mark the start of Snap's efforts to transition to "a camera company." In the short term, Snap is seeking to completely redesign its social app to make it more intuitive to use and has pledged to recreate its Android app from scratch, presumably in an effort to provide users with a more consistent experience as Snapchat's Android performance remains subpar compared to its iOS one. While Tencent's stake in the firm is of the non-voting variety, it remains to be seen whether the company still ends up exerting some influence on the struggling social media startup.

Advertisement
Share this page

Copyright ©2017 Android Headlines. All Rights Reserved.

This post may contain affiliate links. See our privacy policy for more information.
Advertisement

Dominik started at AndroidHeadlines in 2016. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]

View Comments