The share prices for the food delivery giant from China, Meituan have plunged at a high rate in the recent stock trading session. The stock prices for the Chinese food delivery company plummeted after Tencent announced selling its stake.
Meituan Shares Plummet 9%
The share prices for the food delivery company have dipped 9% in the recent trading session as Tencent announced that it would sell its stake.
Tencent has recently announced that it is in the process of selling its stake in Meituan. According to sources, Tencent’s stake currently stands at $24 billion.
Tencent Owns 17% Stake in Meituan
The $24 billion worth of stake Tencent owns is equal to 17% of Meituan’s overall valuation.
Tencent has announced that by selling its stake, it will be able to find a better stance in front of domestic regulators. In addition to that, they will be able to profit from the long-term investment they have made in Meituan.
It was eight years back when Tencent had acquired a 17% stake in Meituan.
No Comments from Tencent or Meituan
The media sources tried reaching out to the spokespersons from both Meituan and Tencent but to not available.
For now, both companies seem to be refraining from making any comments on the situation until there is more information on the matter.
After Tencent made the announcement in regards to selling its stake in Meituan, the tech/gaming giant’s stocks have recorded an almost 1% surge.
The sources claim that if the market conditions are in favor of Tencent, then it will be proceeding with selling shares. The no. 1 messaging application in China ‘WeChat’ is developed and run by Meituan.
A Source Claims Tencent is Not Selling Stake in Meituan
Another very authentic source has made a completely different claim about Tencent. The source has claimed that Tencent is not planning to sell its stake in Meituan at all.
Tencent’s Investment was in Dianping
It was in the year 2014 when Tencent made an investment in Dianping. However, Dianping later merged with Meituan shifting Tencent’s investment from Dianping to Meituan.
Chinese Regulators’ Scrutiny over Tech Giants
Over the past year, the Chinese tech companies have come under fire from the local regulatory authorities. Multiple probes have been launched by the Chinese regulators against major tech companies such as Alibaba, Tencent, and many more.
The Chinese regulators are making sure that the major tech companies in China do not use their influence in the country to reign over start-up companies.
Additionally, the regulatory authorities have also demanded that the companies maintain prescribed standards for data protection.