Chinese tech giant Tencent has bought up a more than 10 per cent stake in Snap, the maker of messaging app Snapchat.
The stake was disclosed in regulatory filings overnight following earnings late on Tuesday evening.
Snap's ownership structure, which gives voting rights only to its founders, means the stake has not previously been disclosed as would normally be the case.
Shares in Snap plummeted as much as 20 per cent after a dismal set of earnings that missed expectations and revealed a multi-million dollar writedown on its first foray into hardware, Spectacles. Founder and chief executive Evan Spiegel admitted that the company must do more to grow and outlined new plans to redesign the app which is popular among younger audiences.
Tencent's stake is likely to be seen as a vote of confidence. The owner of messaging app WeChat previously invested in Snapchat before it went public.