Tencent loses $24bn in market cap after Naspers' selldown
China's Tencent saw its shares down 4.51% at the midday trading break on Friday after the Internet firm's largest shareholder, Naspers, said it would lower its stake for the first time in 17 years.
The Hong Kong-listed stock opened 7.8% lower at HK$405, its lowest opening price since 9 February, before regaining ground to HK$419.6 by noon. The benchmark Hang Seng Index was down 2.81%.
A day earlier, the stock fell 5% following Tencent's late Wednesday report showing quarterly revenue missed estimates as well as expectations of margin pressure, although profit beat forecasts.
Friday's decline wiped $24 billion off Tencent's market value, though at $508 billion, it is still Asia's most valuable listed company and fifth globally behind Apple, Alphabet, Amazon and Microsoft.
South African media and e-commerce group Naspers said yesterday it planned to sell up to 190 million Tencent shares, or 2% of its holding, in a sale that could earn Naspers up to $11 billion. It also said it had no plans to further reduce its holding for the next three years.
"The funds will reinforce Naspers' balance sheet and be invested in classifieds, online food delivery and fintech globally," said CICC analyst Natalie Wu. "We think it is a good opportunity to buy into dips given Tencent's solid fundamentals."
Jefferies analyst Karen Chan said: "Given Naspers' largest single shareholding and board representation in Tencent, we believe its stake sale is unlikely to be a reaction to Tencent's quarterly results.
"Instead of a timed profit-taking move, we believe this is more to improve Naspers' own free cash flow and allow it higher flexibility in pursuing investment opportunities."
A Tencent spokeswoman said it was informed and supportive of Naspers' decision, and that Naspers' intention to keep its remaining stake for the next three years demonstrated its confidence in Tencent.