Snap Jumps as Activists Circle Its $2,200 AR Glasses. Here's the $1 Billion Plan on the Table

Snap (SNAP) shares jumped 6.65% to $6.26 in Friday morning trading, leading a broader rally in social media stocks, as pressure builds on the company to find outside money for Specs, its augmented-reality glasses business. Two activist investors now want Snap to stop funding Specs entirely on its own, though they disagree on what should happen next.

Social media stocks move higher

Snap led the group, while Pinterest posted a solid gain and Meta barely moved.

Prices are from Friday morning trading on October 9, not closing figures.

The $1 billion proposal

Blue Duck Capital Partners, a long-short equity manager based in Manhattan Beach, California, sent a letter to Snap's board this week urging it to raise outside capital for Specs. The plan: sell a 20% stake in the unit at a $5 billion valuation, bringing in about $1 billion. Blue Duck says that would fund roughly two years of development without issuing new Snap shares or draining the company's cash flow.

Blue Duck's argument is that Specs is worth more than investors give it credit for while it sits inside Snap. Chief investment officer Alex Beinfield called Snap "profoundly" undervalued and described the Specs technology as "remarkable." He also acknowledged that widespread adoption is unlikely within the next one to two years, which is why the unit needs a longer runway. Possible investors include venture capital firms or a strategic partner such as SpaceX (SPCX). Blue Duck has not disclosed the size of its Snap position.

A second activist wants a tougher path

Blue Duck is not the only fund pushing. Irenic Capital Management, which has also built a stake in Snap, has argued that the company should spin off Specs or shut it down. Irenic points to more than $3.5 billion Snap has already put into the business and says Specs should now be able to fund itself.

Both funds agree that Snap's core shareholders should stop carrying the full cost of Specs. Where they differ is whether Specs deserves a long-term future: Blue Duck wants to bring in partners to keep building it, while Irenic would rather see it separated or wound down. Snap did not immediately respond to requests for comment.

Where Specs stands

The glasses are priced at about $2,200 and are expected to ship this fall. That price puts them well above mainstream consumer devices, and Blue Duck argues outside funding could help Snap bring it down. For investors, the issue is less about the product than about how much more money it will consume before it can sell in volume.

What to watch

• Snap's response. Whether the board engages with either proposal or commits to keep funding Specs internally.
• Specs launch. Shipping timing, final pricing and early demand this fall will shape how much outside investors might pay.
• November 4 earnings. Snap's third-quarter report will show advertising performance, profitability and how much it is spending on Specs.
• More activist pressure. With two funds now pushing, others could join if the stock stays near current levels.