WeChat owner Tencent snapped up another 12% of Snap this month

We already knew that Tencent, the owner of China’s messaging behemoth WeChat, was an investor in Snap when the company was still a startup going by the name of its flagship app, Snapchat. Now, as Snap’s stock price buckles under the weight of slow user growth and missed revenue expectations, Tencent is deepening its hold on the company.

In a 10-Q SEC filing for its quarterly results that were announced yesterday, Snap disclosed that Tencent has acquired another 145,778,246 shares of Class A common stock in open-market trades, which works out to roughly 12 percent of the company.

This is non-voting stock, and so it means that we will not get much visibility from Tencent and Snap when and if these shareholdings change further, as they will not need to be reported to the SEC.

“Tencent and Snap are not obligated to disclose changes in Tencent’s ownership of our Class A common stock, so there can be no assurance that you, or we, will be notified of any such changes,” Snap writes.

Significantly, it also means that we don’t know what Tencent’s total holdings in Snap are now, either. The two companies, Tencent and Snap, have long been connected to each other.

Tencent took part in at least one funding round, a Series B of $60 million disclosed in 2013, around the time of reports that it was interested in investing in a subsequent round. Further investments from Tencent have never been confirmed.

Tencent was also at one point rumored to be one of the companies interested in acquiring the Snapchat as part of its wider global ambitions, and specifically to expand more into the U.S. market.

It was also once described as a “role model” by Snap’s CEO and co-founder Evan Spiegel, a sentiment that was echoed in the filing released today:

“We have long been inspired by the creativity and entrepreneurial spirit of Tencent and we are grateful to continue our longstanding and productive relationship that began over four years ago,” it writes. “For its part, Martin Lau, Tencent’s President, informed us that Tencent is excited to deepen its shareholding relationship with us, and that it looks forward to sharing ideas and experiences.”

Snap is down 7 percent in pre-market trading today, so the impact of the share purchase may be less impactful on improving its share price, as it is a sign that a significant and strategic investor may be seizing an opportunity to buy up more of a company it believes in, at a time when it’s relatively a good deal to do so.

It’s proven very hard for Snapchat to grow usage and revenues from its image-based messaging app — not least because of a huge amount of competition from the likes of Facebook and its companion apps Instagram, Messenger and WhatsApp; as well as a number of other apps.

Other challenges include the app’s ease of use, both from the perspective of users and would-be advertisers, issues that Snap has vowed it will try to improve in the months ahead. (It has made a little headway on the commercial front: we revealed last week that it had quietly acquired ad tech firm Metamarkets to improve its analytics, measurement and ad buying capabilities.)

For Tencent, despite the problems, Snap still represents a major opportunity to sink its teeth into a service that has very little overlap with its current business, and a lot of potential promise if Snap can fix some of its issues.

Yesterday, Snap reported revenues of $207.9 million and a non-GAAP loss of $0.14 per share, a miss on both counts: analysts had estimated $237 million in revenue and a loss of $0.15 EPS.