When will Tencent’s loyal shareholders throw in the towel?
It is becoming all too familiar: the shares slump on some negative news and analysts rush to say buy, calling it an excellent time to load up — but Tencent keeps dropping
Hong Kong — Naspers’s 31%-owned Tencent’s equity bulls keep facing so many setbacks these days that you wonder when its loyal shareholders will cave. For them, it’s becoming all too familiar: the shares slump on some negative news and analysts rush to say buy, calling it an excellent time to load up on a stock that’s long been among Hong Kong’s most loved and owned. While that may have worked earlier in the year, the reality is Tencent keeps dropping, now down 28% since a peak in January and one of the Hang Seng index’s worst performers in the period. It all kicked off in February, when the shares were caught in a global selloff sparked by frothy tech valuations. Those fears had only just subsided when, a month later, Tencent reported weaker margins. That was followed by a stake sale, a wave of selling from mainland investors, a lack of new games, Tencent’s first profit drop in at least a decade, revoked licences and now what’s turning out to be a significant regulatory wall in Chin...
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