Chinese Internet giant Tencent Holdings on Sunday announced its first restructuring in six years at a time when it faces growing challenges in the face of increasingly stringent state regulation.
The reorganization occurs when Tencent Holdings, which has suffered a sharp drop in market value this year, faces new criticism from analysts and investors, nervous about regulatory obstacles, a diffuse strategy abroad and a growing debt. The gaming and social networking company is one of the Chinese internet groups whose perspectives are in doubt after years of spectacular growth.
The movement is seen as a way to improve the services offered through the cloud for corporate clients among whom its rival Alibaba dominates in China and TME also as a way to increase its content by offering capabilities for a wide range of services such as WeChat, music, games and other entertainment products.
The company also announced that it will create a technology committee to help strengthen its research and development and promote collaboration and innovation. Founded in 1998, Tencent enjoyed uninterrupted growth since it went public in 2004 until this year. Its stock multiplied its value more than 88 times after its flotation, and its stock market capitalization reached a maximum of 578,000 million dollars in January of this year.
The securities in Hong Kong closed at a price of 323.2 HK dollars per share compared to the 406 HK dollars it marked at the end of 2017. The group’s main source of income is in gaming. But its most popular game this year, Battlegrounds Mobile from PlayerUnknown (PUBG Mobile), still awaits China’s authorization for in-game purchases, which are Tencent’s core business.
Tencent, the Chinese Spotify, low expectations of its opening to the stock market
The Tencent streaming company lowers expectations of its IPO. Tencent Music Entertainment Group, the largest music streaming company in China, halved the amount it intends to raise with its IPO in the United States, to the tune of US $ 2,000 million, according to three sources close to the process to the Reuters agency.
The subsidiary of Chinese technology giant Tencent Holdings submitted the transaction confidentially two weeks ago to the US Securities and Exchange Commission (SEC), according to three people with knowledge of the operation, which will be one of the Initial Public Offers (OPI). ) largest of a Chinese company in New York this year.
Tencent Music had initially intended to raise up to US $ 4,000 million, according to sources familiar with the operation, which would have made it the largest stock exchange opening of a Chinese company in the United States in 2018 so far, ahead of the group of ” streaming “iQiyi, which captured US $ 2.420 million in March. That sum would have meant an assessment of around US $ 25,000 million, according to IFR. The sources did not reveal whether the reduction in the amount to be placed on landing pages, has to do with a lower valuation or with which fewer shares will be sold.