The Hong Kong-listed company tumbled nearly 8% to 405 Hong Kong dollars, setting its lowest opening price since February 9 and closing at HK$420 on that day. According to stock exchange data, it was the most traded on Friday. A stock with a turnover of HK$126 billion (approximately US$16.05 billion).
Tencent lost more than $51 billion in market value in just two days. The stock fell by 5% on Thursday, setting its biggest one-day drop in six weeks. It should be pointed out that Tencent’s earnings were released on Wednesday night. The data is better than market expectations, but revenues are not as good as analysts' expectations. The company said that aggressive investment may squeeze profit margins.
Tencent’s current market capitalization of US$508 billion is still the highest listed company in Asia and ranks fifth in the world. It is second only to the United States’ four major technology giants Apple, Google’s parent company Alphabet, Amazon and Microsoft.
Naspers said on Friday that it had won $9.8 billion from the sale of 190 million Tencent shares (2% of its shares). It said it would use the money to strengthen its balance sheet and fund growth.
'The sale of fantastic assets like this has always been a difficult task, especially for assets that allow you to have long-term beliefs. So, this is by no means an easy decision.' Naspers Chief Financial Officer Basil Basil Sgourdos told Reuters.
'This decision is not driven by Tencent's view and the future opportunities we see. The driving factor is actually that we have more confidence in our e-commerce business and the rewards it will bring, so we need Funding to develop this business. 'He said.
Naspers still holds a 31.2% stake in Tencent. It said it has no plan to further reduce its shareholding in the next three years. Scoodos said that he is not worried about Tencent's high valuation or the previous quarter's revenue growth. .
Bernstein analyst Bhavtosh Vajpayee stated that Naspers’ sale of a small shareholding cannot be regarded as a judgement of Tencent’s prospects or high valuation.
'We believe that the reduction of Naspers could have been carried out at a better time. In the market's worries about the potential trade war between China and the United States, the news of Naspers's sale of shares surprised investors quite a bit in the fourth quarter of 2017. He said, 'I think the timing is weird.'
China National Gold analyst Natalie Wu believes that taking into account the sound fundamentals of Tencent, this progress 'is a good opportunity to buy on the bargain.'
Naspers’s interest in Tencent dates back at least to 2001, when it invested $33 million in this newly established Chinese company. Subsequently, Tencent’s amazing growth helped Naspers transform from a newspaper publisher to a private equity investor. multinational.
Ma Huateng, Chairman of Tencent’s Board of Directors, stated in the statement that “Over the years, Naspers has been a firm strategic partner. Tencent respects and understands Naspers’s decision and looks forward to continuing to work closely together to build mutual support and prosperity for the two companies. The future. '