Tencent Cuts Stake in SG’s Gaming & E-Commerce Firm Sea, Selling US$3B Worth of Shares

Chinese multinational conglomerate and parent company of WeChat, Tencent, has sold its shares in Singapore’s Sea Ltd., totalling US$3 billion (approximately S$4.07 billion).

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This divestment is seen to provide Tencent with resources to be used to fund its other investments and social initiatives. It has also fueled speculation about Tencent’s plans for overseas growth and expanding into new areas like the metaverse.

As the leader in China’s social media and gaming industry, Tencent’s portfolio of investments amounted to US$185 billion (S$250.796 billion) in late September according to Bloomberg Intelligence.

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Sea’s shares fell 11.4% last Tuesday, with Tencent selling its shares at US$208 (S$281) each, which reflects a discount of 6.9% compared to the previous close.

While Tencent has reduced its stake in Sea to 18.7%, it continues to maintain a sizeable share in one of Southeast Asia’s most valuable tech companies. Sea has raised its e-commerce outlook for the second time in November 2021. The company has been enjoying a "post-pandemic" surge in worldwide gaming and online retail.

The sale has also affected other Chinese tech stocks as shares fell on Wednesday. Hang Seng Tech Index fell 4.6% for the third straight day. Bilibili, a livestream operating platform, and Meituan, a food delivery giant also experienced a decline and both closed at 11% less. Meanwhile, JD.com’s shares also fell, with China’s second-biggest online conglomerate experiencing a decline of 7.2% while Tencent closed 4.3% lower.