economy
Snap climbs 14% as activist Irenic suggests changes to boost stock's value 7x
Irenic Capital suggested shuttering the Specs division and replacing more than a fifth of Snap's workforce with artificial intelligence.
TL;DR
- Snap shares rose 14% after Irenic Capital Management sent a letter to CEO Evan Spiegel with recommendations.
- Irenic's "6 Steps to 7X" plan aims to increase Snap's stock price from $3.93 to over $26 per share.
- Recommendations include shutting down or spinning off the AR glasses unit, Specs.
- Irenic suggests using AI to replace 1,000 employees (21% of the workforce) to cut costs.
- Irenic Capital manages $2.5 billion in assets and owns about 2.5% of Snap's Class A shares.
- Snap chairman Michael Lynton stated the company welcomes shareholder input and is evaluating actions for long-term value.
- Snap shares are down about 83% since going public in 2017.
- Recent company actions include launching a creator subscription feature and announcing a $500 million stock repurchase plan.