Snap climbs 14% as activist Irenic suggests changes to boost stock's value 7x

Snap CEO Evan Spiegel onstage during the Snap Partner Summit 2023 at Barker Hangar in Santa Monica, California, April 19, 2023.

Shares of Snap climbed 14% Tuesday after shareholder Irenic Capital Management sent a letter to CEO Evan Spiegel outlining changes that could increase the stock's value by almost 600%.

"Snap should not continue doing what it has been doing. It's not working," Irenic wrote in its letter, published on savesnapnow.com alongside a presentation of recommendations.

The recommendations, titled "6 Steps to 7X," aim to increase Snap's stock price from $3.93 to over $26 per share.

Irenic's recommendations include shutting down or spinning off Specs, the company's augmented reality glasses unit. The unit was announced to be a wholly owned subsidiary of Snap in January.

Referencing previous layoffs from Uber , Meta and Block , Irenic said Snap should use artificial intelligence more heavily to cut 1,000 employees, or 21% of its workforce.

"AI can and should replace many existing roles," Irenic wrote under 'rationalize costs,' the company's second recommendation.