JD.com sees shares slide after Tencent says it will give majority of stake to shareholders

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JD.com has seen its shares tank after major stakeholder Tencent has announced it will be giving the majority of its shares away to its shareholders.

Tencent announced that it will declare a one-time dividend in which it will distribute more than 457 million Class A ordinary shares of JD.com to shareholders, with a total value of approximately 127.7 billion Hong Kong dollars ($16.37 billion).

The Chinese big tech giant has several investments in a number of other large tech companies including Meituan and Pinduoduo.

Blue Lotus Capital Advisors’ Shawn Yang told CNBC that its investments could raise questions about Tencent’s size and influence.

“I think that basically it’s Tencent’s choice, right, to gradually reduce those shares and try to show to the public that you know … ‘we’re not that big as you think,’” Yang said.

READ MORE: JD.com smashes Singles’ Day record with $48.7bn in sales

“That probably can reduce some of the concerns of its size and influence.”

Chinese big tech companies have bore the brunt of a nationwide crackdown from Beijing, citing concerns over potential monopolies and data security.

Yang said that JD’s ecommerce business has been “very resilient” this year compared with its rivals Pinduoduo and Alibaba.

JD announced in a release that Tecent’s stake would drop from 17% to 2.3%.

As a result of the news, shares closed 7.02% lower, while Tencent’s climbed 4.24%, bucking the trend seen amongst Chinese tech stocks listed on the Hong Kong Stock Exchange.

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