Tencent's stake in JD.com drops to 2.3%

Source | Official account: capitalwatch

Chinese tech giant Tencent Holdings (HKEX: 00700; OTC: TCEHY) announced plans to divest jd.com (Nasdaq: JD; D.C.), the second largest e-commerce service in China, in the form of a mid-term dividend. HKEX: 09618) is a majority stake.

Tencent will pay out more than $16 billion in JD.com stock as a one-time dividend, a surprising decision as regulators continue to crack down on big tech companies. Tencent President Martin Lau will also step down as a director of JD.com. According to a filing filed by Tencent with the Stock Exchange of Hong Kong, the company plans to issue about 460 million JD.com Class A shares, representing 86.4% of its total share capital and nearly 15% of JD.com's total issued shares. According to a statement released by JD.com, Tencent currently holds about 17% of JD.com's shares, and after this dividend, Tencent's shareholding in JD.com will drop to 2.3%.

Tencent said in a filing filed Thursday that the company ramped up strategic investments in emerging industries, funded their development and expansion, and then exited investments when the company was able to fund its future efforts. Tencent said, "I believe that JD.com has now reached such a status." ”

Just a year ago, as the country's antitrust forms continued to deepen, industry giants were subject to a wide range of regulatory crackdowns, including antitrust, after-school education, games and online content. The new policy also restricts companies that collect large amounts of user data from listing outside the company. Didi, a leading ride-hailing service company in China, in its US$4.4 billion initial public offering, ushered in a cybersecurity review shortly after the listing, and after testing and verification, didi Chuxing App had serious violations of laws and regulations in the collection and use of personal information. Only 5 months later, it was delisted from the New York Stock Exchange. The company said it had started work on delisting on the New York Stock Exchange and started preparations for listing in Hong Kong. China has also worked hard to reform policies to make Hong Kong listings a more attractive option for mainland companies.

Tencent shares were up 4.2 percent at $59.20 as of Thursday's Hong Kong stock close, while JD.com shares were down 7 percent at $33.28.