Snap stock whipsawed after China's Tencent takes a stake in Snapchat's parent
- Chinese internet giant Tencent has taken about a 10 percent stake in Snapchat parent Snap.
- The news comes as a vote of confidence in Snap, one day after the company posted a huge revenue miss for the third quarter.
In a quarterly filing with the Securities and Exchange Commission, Snap said Tencent notified the company this month of the purchase. Tencent runs the WeChat messaging app, as well as online payment platforms and games. Earlier this year, it bought a 5 percent stake in Tesla.
Sources told CNBC earlier that Tencent had purchased 145.8 million nonvoting shares of Snap on the open market over the last quarter. China's largest messaging app has invested in social messaging company before, in 2012 and 2013, in private rounds.
News of the investment comes as a vote of confidence in Snap, one day after the company posted a huge revenue miss for the third quarter.
Average revenue per user was up 39 percent compared with the third quarter last year, falling short of Wall Street's estimates. Snap did beat expectations on the bottom line by a penny a share.
Shares of Snap, which plunged nearly 20 percent in after-hours on Tuesday's revenue miss, erased all of the losses to trade slightly higher on the Tencent filing before losing momentum. In early trading Wednesday, it was nearly 10 percent lower.
Disclosure: CNBC parent NBCUniversal is an investor in Snap.
—The Associated Press contributed to this report.
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