Evan Spiegel, CEO of Snap Inc., speaks onstage during the Snap Partner Summit 2023 at Barker Hangar on April 19, 2023 in Santa Monica, California.
Joe Scarnici | Getty Images Entertainment | Getty Images
Shares of Snap climbed 13% Tuesday after shareholder Irenic Capital Management sent a letter to CEO Evan Spiegel outlining changes that could increase the stock’s value by almost 600%.
“Snap should not continue doing what it has been doing. It’s not working,” Irenic wrote in its letter, published on savesnapnow.com alongside a presentation of recommendations.
The recommendations, titled “6 Steps to 7X,” aim to increase Snap’s stock price from $3.93 to over $26 per share.
Irenic’s recommendations include shutting down or spinning off Specs, the company’s augmented reality glasses unit. The unit was announced to be a wholly owned subsidiary of Snap in January.
Referencing previous layoffs from Uber, Meta and Block, Irenic said Snap should use artificial intelligence more heavily to cut 1,000 employees, or 21% of its workforce.
“AI can and should replace many existing roles,” Irenic wrote under ‘rationalize costs,’ the company’s second recommendation.
According to the letter, Irenic Capital manages about $2.5 billion in assets and owns about 2.5% of Snap’s Class A shares.
“Snap welcomes input from all shareholders and regularly engages with investors on strategy, capital allocation, and governance,” Snap chairman Michael Lynton told CNBC in a statement.
“We’ve taken steps to improve performance, strengthen free cash flow, and offset dilution, and will continue to evaluate actions that drive long-term value for all stockholders,” he said.
Since going public in 2017, shares of Snap are down about 83%.
Last month, the company launched a creator subscription feature to help diversify its revenue.
On Snap’s earnings call last month for Q4 of fiscal 2025, the company announced a $500 million stock repurchase plan.
Snap stock since its IPO.
