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Sea Slumps as Tencent Moves to Cut Voting Stake Below 10% -Breaking

by Mike Robinson

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© Reuters.

By Dhirendra Tripathi

Investing.com – Stock in gaming and e-commerce firm Sea (NYSE:) plunged nearly 7% in Tuesday’s premarket trading after Tencent Holdings’ (OTC:)  decision to cut its voting stake to below 10% left it without the support of one of its top backers. 

Stock of Tencent (HK) closed 0.8% less in Hong Kong

According to Sea’s statement, the Chinese company and its associates have been notified to convert their entire class B ordinary shares to class A. Tencent was previously holding a voting stake, but the amount of that share has not been mentioned.

However, once complete, the move will lead to Forrest Li, the founder, chairman and CEO of southeast Asia’s most valuable company, having around 57% of voting rights in the company, up from 52% currently. 

Sea proposes to raise the voting power for each class B ordinary shares to 15 votes, instead of three.

The development marks Tencent’s second withdrawal from an online platform in less than a fortnight, against a backdrop of increasing pressure on China’s biggest Internet groups from antitrust regulators. It announced last month that it would distribute approximately 457 million JD.com shares (NASDAQ:) worth more than $16 billion in a special dividend for its shareholders. The exercise will cut Tencent’s holding in JD.com to 2.3% from 17%.

 

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