Chinese Internet giant Tencent has acquired a 10 percent-plus stake in Snapchat parent company Snap by buying stock on the open market.
Tencent, which has already owned a small stake, told Snap that it recently acquired 145.78 million shares of its Class A non-voting stock, the tech company disclosed in a filing, saying: “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."
It added: "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."
There had been media reports in 2012 and 2013 that said Tencent had acquired shares in Snap in private transactions.
Reuters said that Snap had about 1.2 billion shares outstanding as of the end of October, which would mean its 145 million-plus shares would give it an economic stake of about 12 percent.
Snap's stock was down 8 percent in pre-market trading at around 7:30 a.m. ET after falling 16 percent in Tuesday after-market trading following a disappointing earnings report, which saw the company miss revenue estimates and post slowing user growth. The Tencent move was seen as a vote of confidence in Snap, boosting confidence in the stock.
This article was originally published by The Hollywood Reporter.