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Key Tech Updates: Microsoft, Apple, Amazon, and More

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Key Tech Updates: Microsoft, Apple, Amazon, and More PART 3 OF 6

Why Tencent Purchased 12% of Snap Stock

Tencent bought 12% of Snap shares

Snap (SNAP) reported latest quarterly earnings on Tuesday, November 7, and the company’s stock fell 14.6% the next day, as its numbers fell short of Wall Street expectations.

But that’s not the only significant news about SNAP stock this week. According to an SEC (Securities and Exchange Commission) filing, Chinese Internet giant Tencent Holdings (TCEHY) has acquired over 12% of the company’s stock. Tencent had invested in the company before it went public, but the number of Snap shares owned by Tencent was and remains unclear.

Why Tencent Purchased 12% of Snap Stock

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Tencent Holdings owns the popular messaging and mobile payment app WeChat. The app had a whopping 962.8 million monthly active users as of August—19% higher YoY (year-over-year).

Why Tencent increased its stake in Snap

Acquiring a stake in Snap could be an opportunity for Tencent to diversify its business, and could even turn out to be a bargain if the American company can fix some of its issues.

Snap is not the only American start-up Tencent has invested in. According to the Wall Street Journal, the Chinese company has invested in 41 US startups since 2011. Notably, it has a stake in Tesla (TSLA) and gaming company Activision Blizzard (ATVI).

Snap’s user base slowed down at a faster-than-expected rate last quarter. CEO (chief executive officer) Evan Spiegel said that the company will be making tweaks to its Snapchat app to make it friendlier to older users. The app is very popular among teenagers at the moment but not very popular among other age groups.

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