Tencent Bows Down To Regulatory Pressure After Alibaba - Report

  • China's Tencent Holding Ltd TCEHY looks to divest fully or bulk of its $24 billion stake in food delivery firm Meituan MPNGYReuters reports.
  • Tencent aims to appease domestic regulators and monetize an eight-year-old investment by the move.
  • Tencent owns 17% of Meituan, valued at $24.3 billion as of August 15.
  • Also Read: Tencent Targets Metaverse After Overseas Opportunities, EV To Drive Growth
  • If market conditions are favorable, Tencent looks to kick off the sale this year.
  • Tencent reduced holdings partly to appease the Chinese regulators and to book hefty profits on those bets. 
  • The value of its shareholdings in listed companies excluding its subsidiaries plunged to $89 billion as of end-March from $201 billion a year ago.
  • Reportedly, the regulators are not happy that tech giants like Tencent have invested in and backed various tech firms that run businesses closely related to people's livelihoods in the country.
  • Alibaba Group Holding Limited BABA is changing its secondary listing status on the Main Board of the Hong Kong Stock Exchange to a primary listing to seek regulatory validation.
  • Bernstein recently hinted at the possibility of Alibaba's Hong Kong listing as its primary listing and the immediate likeliness of fintech affiliate Ant Group's initial public offering.
  • Price Action: TCEHY shares traded lower by 0.33% at $38.31 in the premarket on the last check Tuesday.
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