News - 09/11/2017

China's Tencent acquires 12 percent stake in Snap

China's Tencent acquires 12 percent stake in Snap

Chinese tech and media investment firm Tencent Holdings Ltd has, reportedly, taken a 12 percent stake in Snap Inc - the company which owns the disappearing-messaging app Snapchat.

On November 7th, Snap was punished by Wall Street with its shares falling 16 percent to $12.67, well below their $17 initial public offering price in March: the third-quarter results showed slowing user growth, sales that missed expectations and a bigger-than-expected loss, so shares in the media and messaging company dropped in after-hours trading following the release of the financial report.

Now, according to a filing, Tencent (which already was an investor in Snap) has increased its stake in the company to over 12 percent. The Chinese company bought shares on the open market, the filing added.

The Tencent investment is meant to give Snap a boost of confidence as it looks to fend off threats from bigger rivals like Facebook. Tencent is one of the world’s largest technology companies and the owner of WeChat, the popular Chinese messaging and payment service.

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