- Chinese tech giant Tencent is Snap’s largest shareholder, owning 17%.
- The firm has likely seen a hefty gain thanks to Snap’s stock, which on Wednesday climbed above its initial public offering price for the first time since July.
- You can track Snap’s stock price in real-time here>>
The Chinese tech giant, which has a market cap of more than $US518 billion, snapped up 146 million shares of Snap in November, public filings show. The prices at which Tencent made its purchases are unclear, but Snap shares have surged 25% since then, thanks to the social-media company’s recent earnings beat.
Combined with its $US2 billion pre-IPO investments in Snap, Tencent is currently the largest shareholder, with a 17.5% stake, according to Bloomberg data. That could make for a hefty profit – north of $US500 million – if the firm decides to exit its Snap investment anytime soon.
Snap CEO Evan Spiegel is also seeing green this week. The 27-year-old founder owns just over 10% of the company, and has seen his net worth swell to $US4.3 billion, up about $US1.3 billion following the report.
Tencent might be bullish, but Wall Street remains sceptical of Snap’s future.
Analysts polled by Bloomberg have an average price target of $US15.82 for the stock – 20% below where shares were trading Thursday afternoon.
“Snap reported good 4Q17 results vs. expectations, with revenues above forecasts,” Pivotal analyst Brian Weiser said in a note. “However, we did not hear any commentary nor observe any data which causes us to meaningfully alter longer-term variables in our model. Our price target remains $US10 per share on a YE2018 basis, which continues to lead us to rate the stock Sell.”
Jeffries analyst Brent Thill echoed Weiser’s concerns: “A good quarter doesn’t change our fundamental view that Snap has its work cut out to continue to deserve a premium multiple,” he said.