Hope for Snap Chat

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Snap Chat has managed to disappoint Wall Street for a record of two times with the latest disappointment coming this month. However, the company found a way to overturn the disappointment in less than 24 hours. This happened when the company found the backing of the Chinese internet giant known as Tencent Holdings. The company filed a regulatory filing late on Wednesday evening where it revealed that Tencent Holding had increased its shares in the company up to 12 percent. In the same filing, the company reported that the Chinese company acquired the company shares through the open market. This means that the new investment will give the American company a boost of confidence in a market that is dominated by Facebook. The investment will also help fend off these threats. For starters, Tencent Holdings happens to be one of the biggest technology companies in the world. At the same time, this is the firm that owns the popular messaging app in China known as WeChat. From the third quarter results that were released on Tuesday, investors learned that the company had experienced a small growth than projected. As a matter of fact, the company managed to experience a bigger loss than investors had expected. When trading opened on Wednesday, its shares had dropped by up to 20 percent.

The Tuesday third-quarter results served as a basis for analysts and investors on the Wall Street to get worried whether the company that went for initial public offering in March was in trouble. This comes after its stories video feature was stolen by other companies in the market such as Facebook. Before the company went public, technology investors speculated that the company was more innovative compared to other social media firms such as Facebook. However, since the company went public, it has recorded small revenues and rising costs. At the same time, the investors have doubted with the business strategy being used by the firm. One of the company’s co-founders known as Evan Spiegel said that the company was working on issues that would help it rise. For instance, he said that they were working on simplifying the ad-purchasing procedure. They were also working on issues related to augmented reality. Mr. Spiegel further said that the company was no longer afraid of taking broader steps and making mistakes. He said that he expects the business to continue learning. This is a man who has always been tight-lipped about his strategy with the company.

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