China's Tencent buys 12% stake in Snapchat owner
China's Tencent now holds a 12% stake in Snapchat operator Snap, the company said today.
Snap's announcement of the stake taken by Tencent Holdings, one of China's biggest tech and investment firms and among the world's biggest video games makers, came in a regulatory filing.
It follows reports dating back to 2012 that the Chinese company had invested in Snap.
Snap shares had slumped nearly 20% earlier after disappointing Wall Street with much-slower-than expected advertising revenue and user growth.
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 materialise in 2014.
Snap said in its quarterly report today that Tencent had bought 145.8 million shares of its non-voting Class A common stock on the open market.
Snap had about 1.2 billion shares outstanding, as of October 31.
Shareholders of Snap's Class A share have no voting rights and 95%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 US 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.