Tencent’s biggest shareholder will reduce its stake in the social media and gaming giant, just over a year after promising it would not sell the stock for three years.
Tencent (TME) shares tumbled more than 4% on Tuesday in Hong Kong following the news. On Monday, Prosus (PROSY) and Naspers (NAPRF)‘ stocks soared 16% and 23% in Amsterdam and Johannesburg, respectively.
Amsterdam-based Prosus is Tencent’s biggest shareholder with a 28.8% stake worth about $128 billion.
It’s not the first time Prosus has sold Tencent shares in recent years. Last April, Prosus sold a 2% stake in Tencent for $14.7 billion, the biggest block trade ever at that time. (Block trades are typically arranged directly between big institutional investors rather than on public stock exchanges.)
Prosus pledged back then that it would not sell any further Tencent shares for at least the next three years.
Prosus said Monday that it would use the proceeds from the open-ended stock sale to buy back its own shares and those of Naspers.
“It will also rebalance our asset base towards our fast growing non-Tencent assets,” Bob van Dijk, CEO of Prosus and Naspers, said in the statement.
The company said that it would begin selling small numbers of Tencent shares “regularly and in an orderly manner,” but didn’t elaborate on how many.
Tencent said on Monday the Prosus sale will only represent a small percentage of average daily trading volume in its stock, according to an exchange filing.
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