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China's Tencent Takes a 12% Stake in Snap (SNAP)

November 8, 2017 6:12 AM EST

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(Updated - November 8, 2017 6:16 AM EST)

China's Tencent has taken a 12% stake in Snap (NYSE: SNAP), according to the company's 10-Q. The news follows disappointing results from the social media player after the close.

Tencent has acquired 145,778,246 SNAP shares in the open market, the filing highlighted. With 1.2 billion total A, B and C shares outstanding, this equals a 12% stake. The stake represents nearly 17% of the tradeable 'non-voting' A shares. Further, the stake represents over 28% of the float.

Snap said that Tencent's President, informed the company that Tencent is excited to deepen its shareholding relationship with the company, and that it looks forward to sharing ideas and experiences.

From the filing:

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.

Because our Class A common stock is non-voting, significant holders of our Class A common stock are exempt from the obligation to file reports under Sections 13(d), 13(g), and 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These provisions generally require significant stockholders to publicly report their ownership, including changes in that ownership. As a result, 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.



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