Tencent Holdings to buy back 10 per cent of shares to shore up stock price – South China Morning Post
What happened: Tencent has filed a notice on the Hong Kong Stock Exchange that it plans to repurchase 10% of its currently circulating 9.52 billion shares. The decision is subject to shareholder approval at the company’s May 15 annual meeting. On Monday, Tencent’s shares rose 1.1% to HKD 365 ($47), amid a general rise in Hong Kong’s stock market. Tencent’s move may help shore up the value of its shares, which has risen more than 40% since an October 2018 low but still falls short of the company’s all-time high in January 2018.
Why it’s important: Tencent has seen a partial rebound following a months-long, government-led crackdown on the online game sector, which took a toll on its gaming business last year. The company reported that gaming revenue and growth largely stagnated in the fourth quarter of 2018. Chinese regulators once again began issuing licenses for new games in December, albeit at a much slower pace than before. Facing a potentially grim outlook in gaming, at a March press conference Tencent announced it would increase investment into cloud computing, a field in which its rival Alibaba has also gone “all-in.”