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Tencent sells shares of Southeast Asia’s biggest technology company, spooking investors as it trims portfolio for the second time in two weeks
- Tencent sells down stakes in Singapore consumer internet giant Sea to 18.7 per cent, raising US$3 billion
- Divestment in the biggest public company in Southeast Asia came less than two weeks after it sold down stakes in China’s e-commerce platform JD.com
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Tencent Holdings reduced its stake in Southeast Asia’s most valuable technology company Sea Limited, spooking investors with its second divestment in as many weeks as it trims its sprawling investment portfolio amid China’s antitrust clampdown.
Shares of China’s largest technology company closed 4.3 per cent lower in Hong Kong on Wednesday, their biggest drop in more than three months, after Tencent sold 14.5 million American depository shares (ADS) of Sea at the low end of a price range. The sale pared Tencent’s stake in Sea to 18.7 per cent from 21.3 per cent, reducing its voting power to below 10 per cent, Tencent said on its website.
The sale raised US$3 billion, which Tencent intends to use for funding “other investments and social initiatives,” according to its statement. “Tencent intends to retain the substantial majority of its equity stake in Sea for the longer term and will continue its existing business relationships with the company.”
Tencent sold its Sea shares through a block trade at US$208 per share, according to a term sheet seen by South China Morning Post. Sea’s shares fell 11.4 per cent overnight to a 12-month low of US$197.84 in New York, their biggest single-day percentage decline since March 12, 2020.
Tencent was an early investor in Sea through a tie-up with its forebear Garena, which publishes Tencent’s mobile and PC games around Southeast Asia. Garena was renamed Sea in 2017 ahead of its initial public offering in New York, but the brand remains within the Sea portfolio, which has since grown into a sprawling consumer internet firm with an e-commerce business called Shopee, and digital payment and financial services called SeaMoney with a combined capitalisation of US$110 billion.
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