How Snap Just Gave a Middle Finger to its Voteless Shareholders

They don’t need to know, Snap says. Tencent rues the day it bought a 12% stake.
Tuesday evening, Snap Inc., parent of Snapchat, reported a very ugly quarter, and its shares tanked in late trading. This morning, perhaps to stem the slide, it disclosed in a separate SEC filing that Chinese internet giant Tencent Holdings had acquired 145.78 million shares of SNAP, the crappy non-voting Class A common stock. This briefly boosted shares in early trading, until people started reading the fine print: The purchases were made in the past, and Snap didn’t notify its Class A shareholders because they were voteless and didn’t need to be notified.
Shares are currently down 16%. Tencent joins those who’re ruing the day they bought these misbegotten shares.
In its filings, Snap regularly lists Tencent as one of its competitors, along with Facebook, Apple, Google, Twitter, and others. Tencent is also a pre-IPO investor in Snap, dating to a 2013 fundraising round.
Today’s disclosure said: ‘In November 2017, Tencent Holdings Limited notified us that it, together with its affiliates, acquired 145,778,246 shares of our non-voting Class A common stock via open market purchases.’

This post was published at Wolf Street on Nov 8, 2017.