Irenic Capital Management sent a letter to Snap Inc. (NYSE: SNAP) Co-Founder and CEO Evan Spiegel on March 31, outlining steps the investment firm believes could increase the company's share price to $26.37 from the current $3.93.

Irenic, which manages approximately $2.5 billion and holds an economic interest in about 2.5% of Snap's Class A shares, released a presentation titled "Snap Back to Reality: Save Snap Now" detailing its recommendations.

The firm's proposals include shutting down or spinning off the Spectacles hardware division, which has cost more than $3.5 billion and continues to spend approximately $500 million annually in cash. Irenic also recommends reducing headcount, noting that Snap's workforce grew from about 3,000 employees before COVID-19 to over 5,200 currently.

Additional recommendations include restructuring employee stock compensation from time-based vesting to performance-based targets at $10 and $15 share prices, and improving advertising monetization through artificial intelligence and machine learning tools.

Irenic suggests Snap should leverage its video and image datasets for AI opportunities beyond its current MyAI feature, which currently partners with Microsoft and Perplexity. The firm also proposes using improved cash flow to buy back shares at current discounted levels.

The letter references Snap's corporate governance structure, recommending the company provide Class A shareholders with one vote per share. Under this proposal, public shareholders would hold 36% of voting power, similar to Meta and Alphabet, while maintaining founder control.

According to the letter, Snap's enterprise value as of March 27 was $7.2 billion. The company trades at approximately 1.2 times revenue compared to Meta's 5.2 times revenue multiple. Since its IPO, Snap has underperformed Meta by 364 percentage points and the Nasdaq by 444 percentage points.

The information is based on Irenic's press release and letter to Spiegel.