Tencent suffers stock setback as Dutch group Prosus trims part of US$93 billion stake in WeChat operator

Prosus sold 513,500 Tencent shares on Thursday, part of its selldown programme to fund its own buy-back in Amsterdam

Tencent repurchased 1.31 million of its own shares on the same day; the stock has lost 16 per cent or US$92 billion in market value this year

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A view inside Tencent’s headquarters in Shenzhen in southern Guangdong province in August 2017. Photo: Imaginechina via AFP

Published: 2:32pm, 8 Dec 2023Updated: 5:15pm, 8 Dec 2023

Dutch group Prosus NV sold another piece of its US$93 billion stake in Tencent Holdings to help fund its own stock buy-back in Amsterdam, pressuring the WeChat operator’s stock trading near this year’s low in Hong Kong.

The investment firm sold 513,500 shares on December 7, according to a regulatory filing and a statement on its website. The sale reduced Prosus’s interest in Tencent to 24.99 per cent. The sale was worth about HK$157.4 million (US$20.1 million), based on Tencent’s average trading price on Thursday.

Tencent’s stock fell 0.7 per cent to HK$305.60 in Hong Kong on Friday, after earlier falling as much as 2.2 per cent. The stock fell to a 13-month low of HK$283 on October 24, and has lost 16 per cent or HK$722 billion in market value since Prosus shocked the market in June last year with its Tencent selldown programme.

Tencent, owner of Chinese super-app WeChat, has lost 16 per cent of its market value since Prosus announced its selldown programme in June 2022 Photo: Shutterstock

“If you have a consistent seller on the market who takes up daily trading volume of 3 to 5 per cent, there will surely be pressure on the stock price,” said Willer Chen, senior research analyst at Forsyth Barr Asia. “Tencent is their most liquid asset [to generate cash].”

Tencent, based in Shenzhen, declined to comment. The WeChat operator repurchased 1.31 million of its shares on December 7 for HK$402.1 million, or at HK$304.20 to HK$311 per share, under its buy-back mandate. The company has bought back a total of 108 million shares this year, according to its stock exchange filing.

This week’s cutback is the third such public disclosure. Prosus last reported selling Tencent shares in April this year and December 2022, when its stake fell below 26 per cent and 27 per cent respectively, as required under the local stock exchange’s shareholding rules.

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