SNAP Stock Rockets 13% – Everything To Know About Irenic’s Letter To CEO Evan Spiegel

• Irenic recommended shutting down or spinning off the loss-making Specs unit.
• The firm also urged cost-cutting, noting Snap’s workforce has grown significantly.
• Irenic also recommended using AI to improve ad monetization.

Snap Inc. (SNAP) stock came under the spotlight on Tuesday after activist investor Irenic Capital Management sent a letter to CEO Evan Spiegel outlining several recommendations to improve the company’s performance and valuation.

SNAP shares gained 13% at the time of writing and posted their sharpest intraday rally since April 9, 2025.

Irenic Says SNAP Should Be Worth $35 Billion

Irenic, whose economic interest in Snap’s Class A shares is around 2.5%, believes the stock could rise to $26.37, implying a valuation of roughly $35 billion. It is currently around $7 billion. The firm argues that the estimate may be conservative if Snap executes well and becomes a more profitable, growth-focused business.

To reach this potential, Irenic says meaningful changes are needed. It recommends shutting down or spinning off the loss-making Specs unit. The firm also urges cost cuts, noting that Snap’s workforce has grown significantly without any adjustments, unlike peers such as Meta Platforms.

“Like many of your peers, you over-hired. Unlike your peers, you haven’t course corrected,” the letter read.

Other suggestions include restructuring employee compensation to be more performance-based, using AI to improve ad monetization, and unlocking value from its data assets. Irenic also sees scope for stock buybacks to boost investor confidence and long-term value.

Snap’s Response: Focused On Building Efficient And Profitable Business

According to a Bloomberg report on Tuesday, Michael Lynton, Snap’s Chairman, said the company welcomes feedback from all shareholders and maintains regular dialogue with investors on strategy, capital allocation, and governance.

He added that both the board and management remain focused on building a more efficient and profitable business, while continuing to invest carefully in long-term growth initiatives.

Lynton also noted that Snap has “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.”

In November 2025, Snap said it will integrate Perplexity AI’s answer engine into Snapchat. Perplexity will pay $400 million in cash and equity over one year. The company had also approved a $500 million stock buyback program to offset dilution from employee stock-based compensation.

How Did Retail Traders React?

Retail sentiment on Stocktwits remained in the ‘extremely bullish’ territory over the past 24 hours, amid ‘extremely high’ message volumes.

One user expects the stock price to double.

Year-to-date, the stock has slumped around 44%.

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