Prosus an Amsterdam based firm is Tencent’s biggest shareholder with a 28.8% stake worth about $128 billion is planning on dumping it’s stocks in order to buy back it’s own shares; after promising it won’t sell it’s shares for three years.
Prosus was an early investor in Tencent with over 20 years in the line and has gained a multi-billion dollar return in the Chinese multimedia company.
“We will keep selling Tencent shares to buy back our own shares, it’s open-ended and an unlimited program,” Prosus chief executive officer Bob Van Dijk said in an interview. “It’s actually a small part of Tencent daily traded volumes – it should be maximum between 3 to 5%.”
Tencent stock has experienced a nose dive of about 40% and also hammered by China’s tech crackdown and a weakening economy which led to a whooping $295 billion wiped off its market cap.
Tencent said on Monday the Prosus sale will only represent a small percentage of average daily trading volume in its stock, according to an exchange filing.