Following the announcement by Tencent’s largest shareholder that it intends to sell shares in the Chinese internet giant to finance a share buyback program, Tencent’s stock dropped 2.4% Monday.
Amsterdam-listed To finance stock repurchases, Prosus PRX +17.94% (ticker: PRX.Amsterdam), a Naspers NPSNY +5.51% (NPSNY) subsidiary, said that it will “begin selling limited amounts of ordinary shares… routinely and in an orderly way.” Tencent is 29 percent owned by Prosus (TCEHY).
According to a press release from Naspers, “Tencent is pleased to see Prosus remove the voluntary limitation on the sale of its Tencent shares.” The boards of Naspers and Prosus “have tremendous confidence in Tencent’s long-term prospects,” the statement said.
According to Naspers, Tencent stock sales “will constitute a modest proportion of the typical daily traded volume of Tencent shares.”
Shares of Tencent, which have lost more than 15 percent this year, closed down 1.25 percent in Hong Kong. Shares of Prosus jumped 13.36 percent in European trade in the early morning hours.
Netherland’s Prosus, a subsidiary of Naspers, has sold its whole investment in the Chinese e-commerce business JD.com for $3.67 billion, the company said in a statement Monday.