Tencent distributes $ 16 billion of shares in e-commerce group JD.com to shareholders. This is the first major move by the tech group to unleash the value of its vast investment portfolio as Beijing tightens regulatory oversight in the sector.
The Shenzhen-based high-tech conglomerate will begin distributing JD.com’s 460 million shares of common stock to shareholders in March, reducing its shares from approximately 17% to 2.3%. Tencent President Martin Lau also resigned from JD.com’s board on Thursday as part of the announcement.
Shenzhen-based Tencent is cutting its stake this year after Chinese authorities To be About the country’s tech companies, especially the largest groups such as Tencent and rival Alibaba, which are involved in multiple industries.
Chinese Antitrust Law Regulators in recent months have repeatedly fined both companies for past trading activities.
Tencent did not “try to build an empire” or “try to build up influence,” but by reducing its stake in JD.com, a company official said. rice field. The move wasn’t triggered by specific demands from regulators, he added.
“As [its] The portfolio is getting bigger and bigger, and the general public may start to say where it ends. Do you end up with Tencent owning 20 percent of all the big companies in China? “The person said. Tencent says, “I want people to see that’s not the case.”
“We didn’t want it to be seen as having a lasting big impact on a huge segment of the economy,” he added.
For the past decade, Tencent has been one of the country’s most active investors, fostering hundreds of technology start-ups and listing investments worth RMB1.2 trillion ($ 190 billion) as of September 30. We are gradually increasing our portfolio. Its total market value.
Its most valuable interests include 16% of the e-commerce group Pinduoduo, 17% of the food delivery group Meituan, and about 18% of the short video app Kuaishou. Tencent also holds shares in US companies such as Snap and Tesla.
Tencent said that in the future, when these portfolio companies mature and no longer require external capital, they may begin to close some of their positions.
“The Board believes that JD.com is currently in such a status, and therefore the Board of Directors [shares]”Tencent said.
In Hong Kong, Tencent’s share price rose 4% and JD.com’s share price fell 7%. JD.com’s stock is far superior to its competitors this year as growth continues to be strong and it has largely avoided regulatory crackdowns.
However, this distribution could create additional sales pressure on the e-commerce group. Shareholders will receive one Class A common stock of JD.com for every 21 shares of Tencent they own.
Tencent may also sell some of JD.com’s shares on the open market to address issues related to partial shares and regulatory challenges in distributing shares to U.S.-based investors. He said he had sex.
Robin Zhu of Bernstein said investors typically apply a 20-30% discount on the holding company to Tencent’s investment portfolio. “Movements like today help unleash some of that value,” he said.
People near Tencent said distribution is a new tool and a tax-exempt way to return money to shareholders.
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