Chinese Internet giant Tencent Holdings Ltd (騰訊) yesterday said it could help Snapchat owner Snap Inc publish video games and improve advertising sales after acquiring a 12 percent stake in the US social media network.
Snap’s disclosure in a US regulatory filing that Tencent had recently bought 145.8 million of its shares on the open market set off a wave of speculation among investors about the relationship between the firms.
Shares in Snap on Wednesday closed at US$12.91, down 14.6 percent, as investors pummeled the company for slow user growth and treated Tencent’s move as an investment rather than the precursor to an acquisition.
Tencent’s shares do not have voting power and it will not have a board seat, but the two companies broadly believe in cooperation that goes beyond passive investing, according to Snap’s filing on Wednesday.
Tencent yesterday described a potentially close relationship.
“The investment enables Tencent to explore cooperation opportunities with the company on mobile games publishing and newsfeed, as well as to share its financial returns from the growth of its businesses and monetization in the future,” it said in an e-mailed statement.
It also referred to the potential for “newsfeed ads.”
Games and a newsfeed have not been a part of Snapchat, although the company on Tuesday said it was planning a redesign.
Analysts say Tencent, the world’s largest gaming company by revenue, has benefited from its social media apps for the phenomenal popularity of its smartphone games such as Honor of Kings, and would need the help of local social networks in promoting its games in overseas markets.
The Snapchat app is banned in China, where non-Chinese social media networks are generally restricted, although some videos originating in China were visible on the network on Wednesday presumably because of technological workarounds.
Snap declined to comment beyond a filing in which it said the California company was inspired by Tencent’s creativity and entrepreneurial spirit and grateful to continue a productive relationship.
Snap has an office in Shenzhen, China, where Tencent has its headquarters, to assist in the manufacture of Spectacles, Snap’s sunglasses that have a built-in camera.
Tencent has aspirations to assume a global role in technology and might be buying shares with that strategy in mind, said Lindsay Conner, a Los Angeles lawyer who has represented Chinese companies in the US.
“They often invest in companies to have a seat at the table, to understand businesses better, to see where the leading edge is between technology and content, and to have an insight into technology they should adopt or license,” he said.
Tencent first became an investor in Snap in 2013. The total size of its investment has not been disclosed.
Although Snap’s shares began to trade publicly in March in the hottest debut of a US tech stock in years, results since then have sent Snap shares down below its initial public offering price of US$17.
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS