Comcast Corp's (CMCSA.O) NBCUniversal said on Friday it had invested $500 million in Snap Inc (SNAP.N) as it continues to spend heavily on digital media companies.Snap's shares jumped 8.6 percent to $26.59 in early trading. The company finished its first day of trading with a 44 percent gain compared to its IPO price of $17.00.The investment was made as a part of the Snapchat owner's initial public offering, NBCUniversal Chief Executive Steve Burke said in a memo to employees.Earlier, CNBC reported that Snap's stock allocation to NBCUniversal seems to be the only one made to a new strategic investor, making NBCUniversal the lone U.S. media company with a stake. Comcast has invested heavily in digital-native companies such as BuzzFeed and Vox Media, partly in an effort to better service existing advertisers."With the Snap investment, we have invested over $1.5 billion in promising digital businesses in the last eighteen months," Burke said in the memo.
NBCUniversal has already launched entertainment programs such as The Voice, SNL and E! News' The Rundown on Snapchat. The media company said it expects to launch more Snapchat shows in the coming weeks.NBCUniversal has agreed to hold Snap's shares for at least a year, according to the CNBC report.
Snap disclosed last month that it expected investors buying up to a quarter of its shares in the company's $3.4 billion initial public offering to agree not to sell them for a year.Lock-up periods help companies moderate stock volatility by preventing company insiders from selling their shares within an allotted time.NBCUniversal courted Snap co-founder Evan Spiegel for the past year, CNBC said, and both companies have been working on deepening their relationship.
Snap declined to comment beyond details noted in its prospectus and other U.S. Securities and Exchange Commission filings.Comcast's shares were marginally lower. (Reporting by Narottam Medhora in Bengaluru; Additional reporting by Anya George Tharakan; Editing by Maju Samuel)
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Updated Date: Mar 03, 2017 22:45 PM