- Tram Ho
Shares of giant Tencent just fell 10%, causing the capitalization to evaporate $ 45 billion in just a few hours. Just before that, President Donald Trump signed a ban on WeChat and all transactions with the company that would affect Tencent’s global business.
The company that owns China’s largest social and gaming network has seen its biggest decline since 2011. President Donald Trump’s vague ban not only targets WeChat apps and WeChat Pay, but also affects cooperation with major US corporations.
Tencent is ranked as the world’s largest game publisher in 2019 by revenue. Tencent has partnerships with major US companies such as Activision Blizzard or Electronics Arts. In addition, Tencent also holds a large stake in Epic Games and Riot Games, two developers of two popular titles Fortnite and League of Legends.
Banning WeChat in the US is a trivial matter, but investors are concerned about the second side of the ban. It is intercepting any transaction with WeChat’s parent company, Tencent. It was not clear what the real meaning of stopping all trades was, but investors were frightened and sold off the company’s stock.
Shares in Tencent took the lead after Trump signed a ban on WeChat.
Trump also signed a similar ban targeting the TikTok app, blocking all transactions with the company. Unlike Tencent, however, ByteDance does not have many relationships with US companies.
“The ban on WeChat and TikTok is due to security concerns, national security and user data collection,” said economist Graham Webster . But the ban on trading is a political act and has no good reason.
Source : Genk