NEW YORK, April 1, 2026, 07:17 EDT
Snap Inc. shares surged Tuesday, climbing around 14% to $4.60, after Irenic Capital Management disclosed a roughly 2.5% economic stake—via shares and derivatives—in the social-media company’s Class A stock. The activist fund pressed CEO Evan Spiegel to rein in spending, refine Snap’s approach to artificial intelligence, and reconsider the Specs smart-glasses division.
The campaign is significant for Snap, which has managed to swing back to a quarterly profit and diversify its revenue streams outside of ads. Still, the stock is off roughly 45% this year. Marketers keep turning to bigger names—Meta’s Instagram, TikTok. Pressure’s not letting up.
Snap is juggling two contrasting initiatives right now. The company last month spun off Specs as a standalone subsidiary. Back in February, it announced its direct-revenue business had hit a $1 billion annualized run rate—the amount it would pull in over a year if current trends stick.
Irenic, in a letter dated March 31, argued Snap’s valuation could hit $26.37 a share, around $35 billion, if the company trims its workforce, ramps up buybacks, and embraces AI to sharpen ad pricing and targeting. “It’s not working,” Irenic managing director Adam Katz said of the current strategy, urging Snap to change course. Business Wire
Irenic took direct aim at Specs, calling out Snap for burning through over $3.5 billion on the division and tapping about $500 million in cash each year. The fund argued that Specs should either cover its own costs, get spun off, or simply be shut down. Irenic also pushed for Snap to give Class A shareholders one vote per share—a move it claims could broaden index eligibility, without shifting control away from the founders.
Chairman Michael Lynton said Snap keeps communication lines open with shareholders and has made moves to boost performance, strengthen cash flow, and reduce stock-based compensation dilution. The company is also still considering other actions aimed at driving long-term value.
Snap’s latest numbers offered a boost. Reporting fourth-quarter revenue at $1.72 billion and net income of $45 million, the company saw active advertisers jump 28% in February. Spiegel called it a “strategic pivot toward profitable growth.” The board signed off on a $500 million buyback. Snap Inc. Investor Relations
A turnaround won’t happen overnight. Snap’s first-quarter revenue guidance missed Wall Street’s mark, daily active users dropped by 3 million from the previous quarter to land at 474 million, and Emarketer analyst Max Willens said the ads platform still faces an uphill battle to capture more spending from major brands.
Still, Snap is looking to move away from its heavy dependence on advertising. Back in February, the company reported that its direct-revenue business—which includes Snapchat+, the Memories archive, and in-app purchases—had hit an annualized run rate of $1 billion, with subscriber numbers climbing past 25 million. It also started rolling out a creator subscription option for U.S. users.
Tuesday’s rally wasn’t enough to lift Snap out of the hole—it’s still trading roughly 45% lower than where it started the year, and the price remains well shy of Irenic’s $26.37 target mentioned in its letter.
