Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Snapchat Soars, Reversing Earlier Crash, After Tencent Buys 10% Stake

Courtesy of ZeroHedge. View original post here.

Just as an avalanche of SNAP sellside downgrades was unleashed by Wall Street analysts (JPM and UBS both downgraded to Sell with $15 and $7 price targets, respectively), the proverbial Hail Mary emerged early on Wednesday morning, when hours after reporting atrocious earnings which sent its stock crashing, in its just released 10-Q, Snapchat reported that Tencent, the company behind China's popular messaging platform WeChat, had built a more than 10% stake in Snap, the parent company of Snapchat, through open market purchases. The 10-Q said that Tencent notified Snap that it built a position of 145.78MM non-voting shares in the Los Angeles-based company in recent months.

From the filing:

In November 2017, Tencent Holdings Limited notified us that it, together with its affiliates, acquired 145,778,246 shares of our non-voting Class A common stock via open market purchases. As a result of our ownership structure, Tencent and Snap are not obligated to disclose changes in Tencent’s ownership of our Class A common stock, so there can be no assurance that you, or we, will be notified of any such changes.

The company added:

Our long-term shareholder Tencent Holdings Limited (“Tencent”), a global Internet company based in Shenzhen, China, has notified us that it has recently acquired 145,778,246 shares of our non-voting Class A common stock via open market purchases. We have long been inspired by the creativity and entrepreneurial spirit of Tencent and we are grateful to continue our longstanding and productive relationship that began over four years ago. For its part, Martin Lau, Tencent's President, informed us that Tencent is excited to deepen its shareholding relationship with us, and that it looks forward to sharing ideas and experiences.

Tencent’s purchase accounts for 12.1% of total outstanding shares, or, according to FT calculations, 10% on a fully diluted basis. Tencent The group has been a long-time backer of Snap, having invested early on during venture capital fundraising rounds.

As reported yesterday, SNAP shares crashed more than 20% after the company disclosed revenue and user growth which both missed analyst expectations. In a further bizarre twist, CEO Evan Spiegel laid out a new product roadmap, including the redesign of the main Snapchat app that he promised would be “disruptive to our business in the short term”.

Just prior the release of the Tencent news on Wednesday, shares were down 19% in the premarket. They promptly filled the Tuesday gap, and surged right back over $15 on the Tencent news.


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!