Tencent, the owner of China's popular messaging app WeChat, has quietly acquired a 12% stake in Snap. The news comes the day after the social media company posted disappointing earnings and shares plunged. Dan Ives, Chief Strategy Officer at GBH Insights, joins Cheddar to discuss what this means for both Snap and Tencent. He says this is an imperative step in order for Snap to infiltrate the Chinese market. But what does Tencent get out of the deal? Ives says it gives the company a consumer social platform and a chance to break into the U.S. market. For Snap, he believes Evan Spiegel's company is backed against the wall, but will now have a partner or "mentor." Investors are hoping this partnership can develop into something more strategic over the next 6-12 months.