INTERNATIONAL_ Shares of Tencent plunged after Chinese game store sold $3 billion of shares from Sea Limited.
Tencent said it sold its shares worth more than $3 billion in Southeast Asian tech giant Sea Group. This dragged the Chinese internet company’s stock to end up nearly 13% lower on Jan. 5 – the corollary was foretold.
While Tencent’s equity interest in Sea will decrease from 21.3% to 18.7%, the company said it will keep “a substantial majority” of its equity in Sea “in the long term”. ” and do not sell any more shares for the next 6 months.
Tencent said the proceeds from the share sale will fund other investments and social initiatives.
Meanwhile, Sea Group has also announced plans to increase CEO Forrest Li’s voting power to 57% from the current 54%. At the same time, it will reduce the voting power of Tencent investors to less than 10%.
Sea Group said the decision will be made during its annual general meeting on February 14, where shareholders are expected to vote on the issue.
Li’s voting power in the company will increase as each Class B common share will have voting rights increased from three votes to 15 votes. At the same time, Tencent will convert all of its Class B ordinary shares into Class A common shares, for which it has sent an “irrevocable notice” to Sea Group.
Upon completion of the conversion, Li will own all of Sea Group’s Class B common shares. “The Board of Directors believes that, as Sea has significantly expanded to become a leading global consumer internet company, it is in the company’s best interest to pursue long-term growth strategies. to further clarify its capital structure through the proposed changes,” the company said in a statement.
Last month, Sea’s e-commerce subsidiary Shopee faced calls for sanctions from the Indian commerce agency for allegedly being “of Chinese origin” and claiming that the group was Tencent operated.