Global Economics Flips as Tencent Slashes Post in Online Retailer

Listen to this Article Now Tencent Holdings (OTC: TCEHY), the company’s largest shareholder, decided to sell most of its stake in the online retailer, sending ADRs (NASDAQ: JD) down 8.6% in premarket trading on Thursday.

Tencent believes is now large enough to not require its support, as its stock closed 4.2 percent higher in Hong Kong.

Tencent announced that it will distribute approximately 457 million shares of, valued at over $16 billion, as a special dividend to its shareholders, making them shareholders. Tencent’s stake in will be reduced from 17 percent to 2.3 percent as a result of the transaction.

Tencent President Martin Chiping Lau resigned from the board of directors in accordance with the decision. Both companies will continue to do business together, according to Tencent.

Tencent has amassed stakes in a number of internet companies over the years in order to compete with Alibaba (NYSE: BABA). Other major e-commerce players that it owns significant stakes in include food-delivery company Meituan (OTC: MPNGY) and farm- focused platform Pinduoduo (NASDAQ: PDD). Even though it trails Alibaba, has had a good run in recent years.

The company reported net revenue of around 746 billion yuan (over $114 billion) for the year ended December 31, 2020, up 29 percent. Net income increased by more than fourfold to more than 49 billion yuan.

Story by : Norvisi Mawunyegah