INTERNATIONAL_ Tencent Holdings recently announced to reduce its holdings in Sea Group – Garena’s parent company.
Immediately, this attracted the attention of many investors. Specifically, Tencent reduced its holdings of 14,492,751 shares of Sea Limited. The move will reduce Tencent’s equity in Sea from 21.3% to 18.7%. Along with the proposed change to the shares’ voting rights, Tencent’s voting rights in Sea are expected to fall below 10%.
Tencent intends to maintain its majority stake in Sea for a while and will continue to maintain its existing business partnership with Sea. Tencent will suffer a period of not being able to sell any more shares of Sea for the next six months.
Then, shares of Sea Group plummeted after the US stock market opened today, down 11.41% for the full day, with a market value of $109.727 billion.
Tencent’s reduction in this round is the second largest reduction after it announced a dividend in Jingdong shares to Tencent shareholders last month.
Sea is a well-known Internet corporation in Southeast Asia with the Garena game brand that has been acting as an agent for game products developed by Tencent in foreign markets. Garena itself is the publisher of the battle royale game FreeFire, which has recently enjoyed great success in overseas markets.
According to Sea’s quarterly financial report, Garena’s game revenue for the quarter came in at $1.2 billion, up 29.2 percent year-on-year, and adjusted EBITDA (profit after tax) reached 720 million USD, up 22.3% over the same period last year.
Sea’s global business has grown and expanded significantly in recent years, and this share reduction could free up some of the value of Tencent’s investment in Sea. The transaction also provides Tencent with resources to support other socially responsible and investment projects, while Tencent still holds a majority stake in Sea which can continue to benefit from future growth. future of the company.
If the proposal to change the voting rights of the shares is passed at Sea’s upcoming general meeting, Tencent will convert the super-voting Class B shares into Class A shares and then terminate it. terminated its relationship with the founder and board of directors of Sea Limited. The voting authorization agreement was signed by President and CEO Forrest Li.