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JD.com Tumbles as Tencent Slashes Stake in Online Retailer

Stock Markets Dec 23, 2021 04:42AM ET
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© Reuters.

By Dhirendra Tripathi

Investing.com – JD.com ADRs (NASDAQ:JD) plunged 8.6% in Thursday's premarket trading on the decision of its largest shareholder, Tencent Holdings (OTC:TCEHY), to give up most of its stake in the online retailer.

Tencent, whose stock stock closed 4.2% higher in Hong Kong, believes JD.com is now large enough to not need its backing.

Tencent said it will distribute about 457 million shares of JD.com, worth over $16 billion, in the form of a special dividend to its shareholders, and they will now be shareholders of JD.com.

The exercise will cut Tencent’s holding in JD.com to 2.3% from 17%.

In line with the decision, Tencent President Martin Chiping Lau resigned from the JD.com board. Tencent said both companies will continue to maintain a business relationship.

Tencent built up stakes in several internet companies over the years to rival the more widely known Alibaba (NYSE:BABA). It continues to hold significant stakes in other major e-commerce players such as food-delivery company Meituan (OTC:MPNGY) and farm-focused platform Pinduoduo (NASDAQ:PDD).

JD.com has had a good run last few years even as it trails Alibaba. In the year ended December 31, 2020, the company reported a net revenue of around 746 billion yuan (over $114 billion), up 29%. Net income climbed more than four times to over 49 billion yuan.

 

 

 

 

JD.com Tumbles as Tencent Slashes Stake in Online Retailer
 

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Barak David
Barak David Dec 23, 2021 6:12AM ET
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they sold because JD doesn't need more backing from Tencent?! they make it sound like the holding was a philanthropy move.. that statement makes no sense. it seems the crackdown from the CCP continues.. im glad i got rid off the Chinese stocks
 
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