South African media company forces China’s Tencent shares to fall

The shares of Chinese Tech giant, Tencent Holding Limited on Friday slumped by 7.8 percent for the first time in almost two decades. This was caused by Naspers limited’s decision to sell two percent of its shares in order to reinforce its balance sheet and to accelerate growth.

This fall in shares wiped about $24 billion off Tencent’s market value, though at $508 billion it is still Asia’s most valuable listed company and fifth on the global ranks after Apple, Alphabet, Amazon.com, and MicrosoftThis is one of the global technology stock that fell this week. Facebook Inc’s stock fell drastically over data privacy concerns.

According to the South African media company, this is the first time it is selling any Tencent shares since its investment in 2001. “The company considers Tencent to be one of the very best growth enterprises in any industry in the world, managed by an exceptionally able team. Tencent understands and supports the intention to sell.”

In 2001, Naspers invested $32 million in Tencent, which was then a little-known Chinese startup but now the investment is worth $175 billion with Naspers having a market value of about $125.5 billion. The South African company is expected to use the money from the sale of Tencent shares to invest in its classifieds, online food delivery and fintech businesses and make other investments. The sale of the 190 million shares will cut the stake held by Naspers to 31.2 percent from 33.2 percent.

In recent years, Tencent has lifted its international profile with several big acquisitions. Last year it bought 12 percent stake in Los Angeles social-media company Snap Inc and a five percent stake in Tesla Inc. However, analysts are still optimistic that the company will still bounce back and grow at a strong pace.