China’s Tencent Snaps Up 10 Percent Stake in Snapchat Parent
Move reported after Snap missed Q3 earnings expectations
Thom Geier | November 8, 2017 @ 4:34 AM
Last Updated: November 8, 2017 @ 4:40 AM
China’s internet behemoth Tencent has acquired at least a 10 percent stake in Snapchat parent company Snap, the company disclosed in an SEC filing on Wednesday.
Tencent snapped up 145.78 million shares of non-voting common stock on the open market. “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,” Snap said in the filing.
The disclosure comes one day after Evan Spiegel’s social network reported hugely disappointing earnings for the third quarter in a row.
On Tuesday, Snap reported $207.9 million in revenue and a loss of 14 cents a share for the three months ended Sept. 30 — falling short of analyst estimates of $237 million in revenue, but slightly beating earnings estimates of 15 cents a share.
Snap reported 178 million daily active users — less than the 180.5 million it projected. It added 4.5 million DAUs for the quarter, representing only a 3 percent increase over last quarter. And even as Snap continues to scale, their hosting costs continue to increase, jumping 11 percent per user quarter-over-quarter.
Snapchat now has 178 million DAUs — trailing the 300 million its chief rival, Instagram Stories, boasts. At the same time, the company failed to meet Wall Street’s expectations for sales. Snap pulled in $207.9 million in revenue, falling short of analyst estimates by nearly $30 million.
6 Tech Giants Shaking Up News, From Jeff Bezos to Laurene Powell Jobs (Photos)
Tech leaders are increasingly intertwined with the news business. While some want to support old properties, one set out to destroy a new one. Here they are.
Jeff Bezos – Washington Post
The Amazon founder purchased the Washington Post in 2013 for $250 million in cash. President Trump has called the paper the “Amazon Washington Post.”
The Facebook co-founder purchased The New Republic in 2012, becoming executive chairman and publisher. However, he sold the venerable political magazine to Win McCormack in 2016, saying he "underestimated the difficulty of transitioning an old and traditional institution into a digital media company in today’s quickly evolving climate."
The eBay founder is a well-known philanthropist who created First Look Media, a journalism venture behind The Intercept. Inspired by Edward Snowden's leaks. Omidyar teamed up with journalists Glenn Greenwald, Jeremy Scahill and Laura Poitras to launch the website “dedicated to the kind of reporting those disclosures required: fearless, adversarial journalism.”
The PayPal co-founder doesn’t own a news organization, but he makes this list because he essentially ended one -- Gawker -- proving once again the power of an angry billionaire. Thiel secretly bankrolled Hulk Hogan’s sex-tape lawsuit against Gawker Media because he was upset that the website once outed him as gay. Hogan won the defamation lawsuit against the site that sent its parent company into bankruptcy, and Gawker.com is no longer operating.
OK, so Facebook isn’t technically a news organization… yet. However, the company is preparing to launch its much-anticipated lineup of original content later this summer, and there are also signs that it's on the verge of becoming an even bigger media platform.
Campbell Brown, Head of News Partnerships at Facebook, confirmed last week it’s developing a subscription service for publishers willing to post articles directly to Facebook Instant Articles, rather than their native websites.
Tech is increasingly intertwined with news, for better or worse
Tech leaders are increasingly intertwined with the news business. While some want to support old properties, one set out to destroy a new one. Here they are.