Mar 11, 2020 (Market Realist via COMTEX) -- Comcast /zigman2/quotes/209472081/composite CMCSA +1.28% doesn't own Snap /zigman2/quotes/205087158/composite SNAP -0.10% shares anymore. In March 2017, Comcast invested $500 million in Snap stock just as the social media company prepared to go public. According to Hollywood Reporter , Comcast sold off its entire stake in Snap last year. The report stated that Comcast made a profit of $293 million from selling Snap stock.
Snap priced its IPO at $17 per share. Although the stock rose more than 40% on its debut, its hot run was short-lived. Due to competition from Facebook /zigman2/quotes/205064656/composite FB -1.10% and its family of apps, Snap's Snapchat struggled to grow its user base. Snap stock crashed in 2018 and fell as low as $4.99. However, the stock made a strong comeback in 2019 and gained 196.4% following the overhaul of the Snapchat app .
Comcast sold Snap stock, works to reduce debt
Comcast's sold Snap stock because it wants to reduce its debt burden. The company plans to raise funds to finance its business development programs.
Comcast's debt skyrocketed after it acquired European broadcaster Sky in 2018 for about $40 billion . The company took loans to finance part of the Sky acquisition, which caused its debt load to jump to $112 billion at the end of 2018. Comcast decided to pause its stock repurchase program to focus on repaying its debt. The company's debt fell to $102 billion at the end of 2019.
In addition to repaying debt, Comcast also requires cash for other projects. For example, the company will need $2.0 billion to finance the launch of its Peacock video streaming service. Comcast finished 2019 with $5.6 billion in cash. The company struck a deal with Walt Disney /zigman2/quotes/203410047/composite DIS +2.89% that allows it to sell its Hulu stake for at least $5.8 billion, which could help boost its war chest.
Comcast maintains ties with Snapchat after stake sale
In addition to the IPO investment, Comcast also struck a content partnership with Snap. According to the arrangement, Comcast will supply content for Snap to share on its Snapchat platform. Comcast has maintained the content partnership even though it doesn't invest in Snap stock anymore, according to Hollywood Reporter .
Snapchat wrapped up 2019 with 218 million daily active users on its platform worldwide.