Tencent’s move to sell $ 3 billion worth of Sea shares is falling sharply

Shares of Sea in Sea fell more than 11 percent on Tuesday after China’s online group Tencent said it would sell more than $ 3 billion of its shares in Singapore’s New York-based gaming and e-commerce group.

China’s most valuable publicly listed technology company said that after the transaction is completed, its stake in Sea will fall from 21.3 percent to 18.7 percent. SeaShares listed on the Nasdaq on Tuesday fell 11.41 percent to $ 197.84.

The Hang Seng Tech index fell 3.5 percent on Wednesday.

Tencent’s announcement came less than a month after the company sold its stake in JD.com, China’s e-commerce.

The group said it would keep a “substantial majority” of its capital in the Sea “in the long run” and would no longer sell shares for the next six months. He did not give a reason for the sale, but said the proceeds would “finance other investments and social initiatives”.

Tencent said last month he would share $ 16 billion in stock in JD.com shareholders, reducing its stake from about 17 percent to 2.3 percent.

A person close to Tencent said at the time of the sale that regulators had not asked the company to sell its investments, which together are worth about $ 259 billion, according to Bernstein analysts, but Tencent was wants to show it was not “building an empire.”

Tencent did not want “to be seen as a huge impact on a huge segment of the economy in eternity,” the person added.

In addition to selling its stake in Sea, Tencent also said it would convert its Class B shares, which currently have three votes each, to Class A shares at the Singapore-based company’s annual meeting in February. Following the conversion, Forrest Li, Sea’s CEO, will have all Class B shares, and Tencent’s voting power in the company will drop to less than 10 percent.

Tencent was a major investor in Chinese technology companies, but over the past year the group has also been quickly expanded their foreign investment.

Additional reporting by Hudson Lockett of Hong Kong