Tencent Shares Plunge after Founder Ma Pares Stake in Firm
Recently, Tencent Holdings Ltd.’s founder and Chairman Pony Ma have put up for sale it is nearly HK$2 billion ($260 million) of the Chinese social media share.
Moreover, the firm’s gaming giant shares were also sold as they soared back above HK$400.
According to a filing with Hong Kong Exchange (HKEx) from January 14-17, Ma has offered 5 million shares at an average price of HK$398.1 to HK$401.4 a share.
Meanwhile, Ma’s holdings at Tencent plunged to 8.53% from 8.58% after the sale.
On January 3, Tencent President Liu Zhiping also sold HK$192 million of stock as indicated by the filing. Liu’s stake lessened to 0.55%.
In more than two years, the selling was Ma’s first share sale. He retailed about HK$2.1 billion of stock at average prices of HK$348 to HK$351.
It was from October 11-13, 2017. In addition, Liu sold 1 million shares at HK$434.36 last March 27, 2018.
The recent sale occurred just before the lock-up period. It was in advance of Tencent’s scheduled 2019 earnings report on March 18.
On the other side, executives are not to trade their registered company stocks 60 days or fewer before an earnings announcement under HKEx rules.
This year, Tencent’s stock is higher by more than 5%. The first day Ma started to sell his shares was on January 14, the stocks then leaped to HK$413.
Further Movement of Tencent’s Shares
In the previous two years, Tencent’s stock was under pressure. However, the Tencent’s stock then hit its all-time high of HK$471.20 on January 26, 2018.
Two months later, South African internet and media firm Naspers Ltd., sold about 2% of the company at HK$405 a share. It has then been slashing its stake to 31.2% from 33.2%.
Moreover, Naspers Ltd. was one of Tencent’s largest shareholder.
The stock sale commemorates its first time Naspers retailed any of its stake in Tencent, which was in 2001.
In 2018, a nine-month suspension by the government on the new game authorizations amid a crackdown on aggressive content and compulsion to online games hindered Tencent’s ability.
The matter is to make money tainted on a few of its popular games.
On the flip side, the stock tumbled 23% during the year. Not until January 13, the share increased back to the level before the Naspers sale.
Meanwhile, the transactions made by senior executives, such as standard for tech firms, do not necessarily mean a loss of belief in future growth, according to Guan Bowen, a senior analyst at eFusion Capital Ltd.
In a news report, Tencent declared a 13% decline in net profit in the third quarter to 20.4 billion yuan ($2.9 billion).
The firm has been lacking analysts’ estimates and signifying denser income growth from advertising and PC games.
Yesterday, Tencent’s shares inched down less than 1% to HK$396 after hitting the session high of HK$405.
