Tencent takes 12% stake in Snap Inc

new york — Snapchat parent Snap Inc. disclosed on Wednesday that Chinese tech giant Tencent had taken a 12 per cent stake, in a sign of confidence in the social network which has delivered disappointing results since its share offering this year.

A securities filing showed Tencent Holdings had purchased some 146 million shares of Snap non-voting stock in open market purchases in November.

Those shares would be worth some $220 million at Snap’s current value, or 12 per cent of the equity.

Snap, whose social network and disappearing messages has made it a hit with young smartphone users, has seen its share price slump amid disappointing results including another quarterly update Tuesday showing its losses tripled to $443 million.

Shares in Snap fell some 16 per cent in after-market trades following the results, but the disclosure on Tencent could provide a lift.

Snap reported the number of daily Snapchat users rose to 178 million in the past quarter, a weaker-than-expected 17 per cent increase from a year ago.

Although Snapchat is best known for its smartphone messaging, it has also developed partnerships with numerous media outlets eager to reach its audience with news, video and other content.

Snap executives said they overestimated demand for its Spectacles sunglasses with builtin cameras, losing just shy of $40 million that it will mark down on its books. —AFP