Shares of Snap climbed 13% 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 alongside a presentation of recommendations.
According to the letter, Irenic Capital manages about $2.5 billion in assets and owns about .
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.
"Snap welcomes input from all shareholders and regularly engages with investors on strategy, capital allocation, and governance," Snap chairman Michael Lynton told CNBC in a statement.
"We've taken steps to improve performance, strengthen free cash flow, and offset dilution, and will continue to evaluate actions that drive long-term value for all stockholders," he said.
Since going public in 2017, shares of Snap are down about 83%.
Last month, the company launched a creator subscription feature to help diversify its revenue.
On Snap's earnings call last month for Q4 of fiscal 2025, the company announced a $500 million stock repurchase plan.
