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Snap's announcement of the stake taken by Tencent Holdings Ltd,
one of China's biggest tech and investment firms and among the
world's biggest video games makers, came in a regulatory filing
and follow reports dating back to 2012 that the Chinese company
had invested in Snap.
Snap shares had slumped nearly 20 percent earlier after
disappointing Wall Street with much-slower-than expected
advertising revenue and user growth on Tuesday.
They recovered to trade down just 2 percent at $14.80 in
premarket trading from a close of $15.12 on Tuesday.
Media reported in late 2012 and 2013 that Tencent had bought
shares in Snapchat through a series of private rounds, while an
additional deal failed to materialize in 2014.
Snap said in its quarterly report on Wednesday that Tencent had
bought 145.8 million shares of its non-voting Class A common
stock on the open market. (http://bit.ly/2zqvybE)
Snap had about 1.2 billion shares outstanding, as of Oct 31.
Shareholders of Snap's Class A share have no voting rights and
95 percent of the company's voting power rests with co-founders
Evan Spiegel and Bobby Murphy.
As a result of Snap's largely private ownership structure,
Tencent and Snap, unlike many U.S. stock market-listed
corporations, are not obligated to disclose changes in Tencent's
ownership of Snap's Class A stock, Snap said in the regulatory
filing.
(Reporting by Arjun Panchadar and Supantha Mukherjee in
Bengaluru; Editing by Sai Sachin Ravikumar)
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