Tencent notified Snap that it recently acquired 145.78 million shares of non-voting common stock, Snap disclosed in its 10-Q filing Wednesday. “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 pushed Snap shares up 2% in premarket trading Wednesday, helping the stock rebound from the messaging and media app maker’s disastrous earnings report for the third quarter of 2017.
Snap dramatically missed Wall Street user-growth and revenue expectations for Q3. That led CEO Evan Spiegel to announce a series of changes, including plans to redesign Snapchat to be easier to use and new monetization options for creators in 2018.
Tencent operates WeChat – China’s largest messaging app, with 963 million users as of mid-2017 – and streaming service Tencent Video. Tencent has previously invested in Snap in private funding rounds in 2012 and 2013.
Snap actually lists Tencent among its competitors, citing the Chinese internet giant alongside Apple, Facebook (including Instagram and WhatsApp), Google and YouTube, and Twitter.
Tencent wasn’t required to file SEC reports disclosing its 10% stake in Snap, because Snap’s Class A common stock is non-voting and therefore exempt from those reporting rules. As Snap told investors, “Tencent and Snap are not obligated to disclose changes in Tencent’s ownership of our Class A common stock, so there can be no assurance that you, or we, will be notified of any such changes.”