Blue Duck urges Snap to raise outside capital for Specs

Blue Duck Capital Partners wants Snap to raise $1B by selling part of Specs at a $5B valuation. The proposal would bring in outside investors while leaving public shareholders’ ownership of Snap unchanged. Specs are scheduled to go on sale in the United States, Britain and France this autumn.

How did the proposal emerge?

Blue Duck Capital Partners wrote to Snap’s board on Tuesday, urging it to sell about a fifth of Specs. The fund’s chief investment officer, Alex Beinfield, suggested venture investors or a strategic partner such as SpaceX could provide the capital. The proposal comes as Snap prepares to bring its augmented reality glasses to three markets. It is the second fund to press Snap over the future of Specs.

An earlier investor, Irenic Capital Management, has argued that Snap should spin off Specs or shut the business. Its position differs from Blue Duck’s proposal, which would bring in outside money while keeping Specs within Snap. Irenic has said that more than $3.5B has already gone into the division and that it should be self-funding by now. Snap has not been reported as accepting either fund’s proposals.

What is proposed now?

Blue Duck’s suggested transaction would sell about a fifth of Specs for $1B, using a $5B valuation for the business. The fund says that money could cover about two years of Specs’ spending. It also says a capital raise could help bring down the glasses’ price. That price was reported as $2,195 in June, before the planned autumn launch.

The board has not been compelled to act by either fund. Snap’s share structure, established when the company listed in 2017, gives public shareholders no votes. Blue Duck holds Snap shares and call options, but has not disclosed how many. The fund also reserved the right to sell immediately after publishing its letter, according to the source report.

What remains unresolved?

The proposed valuation is being discussed before Specs has been bought by customers. The source report says the glasses will reach the United States, Britain and France this autumn, but gives no confirmed launch day. It also does not report whether Snap’s board has responded to Blue Duck. Those details matter to investors assessing the timing and terms of any possible transaction.

Snap’s next steps are therefore not established in the available reporting. The proposal depends on an outside investor agreeing to buy a stake, and no buyer is named as committed. The company has also not said whether it plans to change Specs’ structure or funding. For now, the reported facts describe an investor recommendation, rather than an announced deal or a completed financing.