Tencent Holdings Ltd’s shares fell more than 4% yesterday, wiping out around $23bn of market value, after the Chinese Internet firm’s largest shareholder, Naspers Ltd, lowered its stake for the first time in 17 years.
The Hong Kong-listed stock opened almost 8% lower at HK$405, its lowest start since February 9, and closed at HK$420.
Bourse data showed it was the most traded stock yesterday, with turnover of HK$126bn ($16.05bn).
Tencent has now lost more than $51bn in market value in two days, having fallen 5% yesterday – its steepest in over six weeks.
That decline came after Tencent late on Wednesday reported better-than-expected profit but missed analysts’ revenue estimate and said aggressive investment might squeeze profit margins.
With a current market capitalisation of $508bn, Tencent is still Asia’s most valuable listed firm and fifth globally behind Apple Inc, Alphabet Inc, Amazon.com Inc and Microsoft Corp.
South African media and e-commerce group Naspers said yesterday it raised $9.8bn from the sale of 190mn Tencent shares, or 2% of its holding.
It said it will use the money to strengthen its balance sheet and fund growth.
“It’s always hard to sell a fantastic asset like this, particularly one in which you have such great belief for the long term. So yes, it wasn’t an easy decision,” Naspers Group chief financial officer Basil Sgourdos told Reuters.
“It is not driven by any view on Tencent and the opportunities we see going forward.
It’s really driven by increased confidence in our e-commerce segment and the returns it is delivering, so we need capital to grow that business,” he said.
Naspers, which still has a 31.2% stake in Tencent, said it has no plans to further reduce its holding for the next three years.
Sgourdos said he has “zero” concern over Tencent’s high valuation or about last quarter’s revenue growth.
Bernstein analyst Bhavtosh Vajpayee said the sale of a small portion of Naspers’ stake cannot be considered a judgement on Tencent’s prospects or expensive valuations.
“We think the sale could have been better timed. Coming amidst trade war fears in the markets as well as a mixed result for the fourth quarter of 2017, the news of the sale was quite a surprise,” he said. “Oddly timed is how I would describe this.”
CICC analyst Natalie Wu called the development “a good opportunity to buy into dips given Tencent’s solid fundamentals.”
Naspers’ interest in Tencent goes back at least as far as 2001 with a $33mn bet on the newly founded Chinese firm.
Tencent’s breakneck growth subsequently helped Naspers transform from a newspaper publisher into a multinational with private equity-style investments. In a statement, Tencent chairman Pony Ma said, “Naspers has been a steadfast strategic partner over a great many years.
Tencent respects and understands Naspers’ decision and looks forward to continuing to work closely together in building a mutually supportive and prosperous future for both 
companies.”




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