An activist investor disclosed a stake in Snap and demanded change. Shares soared 14%

Activist investor Irenic Capital disclosed ownership of a stake in Snap, the owner of social network Snapchat. In addition, he demanded from the head of the company Evan Spiegel urgent changes - from cost-cutting and share buybacks to the spin-off or closure of the production of smart glasses. Snap shares rose 14% in a day against this backdrop. According to Irenic, its proposed measures could help to increase quotations almost six times more.

On March 31, hedge fund Irenic announced an "economic interest" in Snap of approximately 2.5% of the company's Class A shares. The fund also sent a letter to Snap's CEO with a list of requested changes to the company that Irenic believes could drive its share price to $26.37. That's about 6.6 times the value of the securities at the time the letter was published.

The fund's statement triggered a rally in Snap shares. The stock rose 14.4% at the end of trading on March 31 to $4.6. The rapid rise in Snap shares coincided with optimism in the market as a whole, which lifted the "technology" index Nasdaq Composite by 3.8%.

Irenic's first demand in the letter was a review of Specs' smart glasses business: it should either be spun off or sold, according to the activist investor. "Snap has spent over $3.5 billion on Specs and spends approximately $500 million in cash annually. If Specs cannot fund itself by now, it is time to shut it down," the letter reads. In January, the company announced that Specs would be spun off as a separate division within Snap Inc.

Another area of reform is strict cost optimization. In particular, Irenic pointed to Snap's perceived bloated staff: "Like many competitors, you overestimated hiring needs. Unlike them, you have not adjusted course." The fund cited Ma, which cut 25% of its staff between 2022 and 2023, and Block, which announced in 2026 that it would lay off 40% of its staff.

The investor also advocates launching an expansion of the share repurchase program, stressing that the securities are severely undervalued. In November 2025, Snap announced the launch of a $500 million Class A share repurchase program.

A separate set of recommendations relates to revenue growth through the use of AI tools. Irenic believes Snap should more aggressively adopt AI to improve ad monetization and ad targeting, citing "dramatic improvements" in the performance of competitors such as Meta and AppLovin.

The activist also suggested introducing the principle of "one share - one vote" for Class A shareholders. According to Irenic's estimates, this would give public investors about 36% of votes and would bring the governance structure closer to the practices of companies such as Meta and Alphabet.

"Snap shouldn't keep doing what it's doing now. It's not working," the activist investor summarized.

Currently, Snap CEO Evan Spiegel and its co-founder Bobby Murphy control Snap through a special class of voting shares, Bloomberg notes.

Irenic Capital was founded in 2021 by Adam Katz, who worked at activist fund Elliott Investment, and Andy Dodge, from another activist fund, Indaba Capital. Irenic already has a track record of activist campaigns, including a 2023 push for News Corp, controlled by the Murdoch family, Bloomberg recalls.

Snap is facing regulatory and judicial pressure. On March 26, the European Union launched an investigation into the platform for verifying the age of users and combating criminal offenses against minors, Bloomberg recalls. In the U.S., a recent court ruling against Meta and Google, which found the companies liable for social media addiction, was just the beginning of a broader wave of lawsuits against tech companies, including Snap, Bloomberg notes.

Most analysts have a neutral stance on Snap's stock: they have 33 Hold ratings out of 47 total, MarketWatch shows. Another 11 analysts recommend the stock to buy and three analysts think the stock should be sold.

Since the beginning of the year, Snap quotes have fallen by 43%. The average target price of Snap securities is $7.86, which means a potential upside of 71% relative to the closing price on March 31.

This article was AI-translated and verified by a human editor