by Staff Writers
New York (AFP) Nov 8, 2017
Snapchat parent Snap Inc. disclosed Wednesday that Chinese tech giant Tencent had taken a 12 percent stake, a sign of confidence in the social network that has delivered disappointing results since its share offering this year.
A securities filing showed Tencent Holdings had purchased some 146 million shares of Snap non-voting stock in open market purchases in November.
Those shares would be worth some $220 million at Snap's current value, or 12 percent of the equity.
Brian Wieser at Pivotal Research said the Tencent investment should not impact Snap's valuation even if it conveys some confidence in the US firm.
"It seems highly unlikely that Tencent would ever be in a position to buy the whole company," he said in a note to clients.
"It seems equally unlikely that Snap would ever be allowed to establish a foothold in China even if their relationship with Tencent were deeper."
Snap, whose social network and disappearing messages has made it a hit with young smartphone users, has seen its share price slump amid disappointing results including another quarterly update Tuesday showing its losses tripled to $443 million.
Snap shares skidded 14.6 percent to close at $12.91, as the news on Tencent did little to stem the decline.
Snap reported the number of daily Snapchat users rose to 178 million in the past quarter, a weaker-than-expected 17 percent increase from a year ago.
Although Snapchat is best known for its smartphone messaging, it has also developed partnerships with numerous media outlets eager to reach its audience with news, video and other content.
Snap executives said they overestimated demand for its Spectacles sunglasses with built-in cameras, losing just shy of $40 million that it will mark down on its books.
- 'We haven't seen inflection' -
Mark Mahaney at RBC Capital Markets downgraded Snap following the earnings, saying growth has been disappointing.
"We still haven't seen an inflection in (user) growth despite substantial product innovation," Mahaney said in a note to clients. "Advertisers go where the eyes are and we need to see further user growth."
Tencent is one of China's largest tech firms, known for its WeChat social network and investments in media, gaming, online content and other segments.
Tencent shares have rocketed 70 percent this year on expectations of continued success in its core games business, which includes the wildly popular "Honour of Kings" and other hits, and on hopes that it will realize the advertising potential of the widely used WeChat.
Bangkok (AFP) Nov 7, 2017
Face-scans or fingerprints will be needed to buy SIM cards in Thailand from next month as the kingdom tries to crack down on electronic fraud and encourage mobile banking. The new biometric system - which follows similar requirements in Bangladesh, Saudi Arabia and Pakistan - will begin on December 15, according to the telecoms regulator. "We're entering the digital age, our money no ... read more
Satellite-based Internet technologies
|The content herein, unless otherwise known to be public domain, are Copyright 1995-2017 - Space Media Network. All websites are published in Australia and are solely subject to Australian law and governed by Fair Use principals for news reporting and research purposes. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA news reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. All articles labeled "by Staff Writers" include reports supplied to Space Media Network by industry news wires, PR agencies, corporate press officers and the like. Such articles are individually curated and edited by Space Media Network staff on the basis of the report's information value to our industry and professional readership. Advertising does not imply endorsement, agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement|