Tencent Sells $3B Stake in Gaming Company

Tencent is continuing a multi-billion dollar reallocation of funds, selling around $3 billion in Sea.

The Chinese video game and internet giant said it was unloading about 14.5 million shares for $208 apiece, reducing its stake to 18.7% from 21.3%. The price represents a 6.9% discount on Monday’s closing price.

Sea, an e-commerce and gaming company based in Singapore, has partnered with Tencent on video game distribution in Southeast Asia. Its market capitalization has grown nearly five times larger in the last two years, despite a roughly 12% fall in the wake of Tencent’s sale.

• Tencent said it would use the cash to “fund other investments and social initiatives.” 
• In December, Tencent pulled back from e-commerce company JD.com Inc., distributing around $16.4 billion in shares to its own shareholders. The move was seen to reduce risk amid China’s crackdown on gaming and internet businesses.

Turbulent Times

Tencent has had to reevaluate aspects of its business under increased regulatory scrutiny. In August, China limited the amount of time children can play video games to three hours a week. 

Shortly before that, the company acquired gaming company Sumo Group for $1.27 billion and took a majority stake in game maker Yager.

Tencent’s stock is down around 42% from its 2021 high last February.