This post was originally published on this site
Investing.com – JD.com ADRs (NASDAQ:JD) plunged 8.6% in Thursday’s premarket trading on the decision of its largest shareholder, Tencent Holdings (OTC:TCEHY), to give up most of its stake in the online retailer.
Tencent, whose stock stock closed 4.2% higher in Hong Kong, believes JD.com is now large enough to not need its backing.
Tencent said it will distribute about 457 million shares of JD.com, worth over $16 billion, in the form of a special dividend to its shareholders, and they will now be shareholders of JD.com.
The exercise will cut Tencent’s holding in JD.com to 2.3% from 17%.
In line with the decision, Tencent President Martin Chiping Lau resigned from the JD.com board. Tencent said both companies will continue to maintain a business relationship.
Tencent built up stakes in several internet companies over the years to rival the more widely known Alibaba (NYSE:BABA). It continues to hold significant stakes in other major e-commerce players such as food-delivery company Meituan (OTC:MPNGY) and farm-focused platform Pinduoduo (NASDAQ:PDD).
JD.com has had a good run last few years even as it trails Alibaba. In the year ended December 31, 2020, the company reported a net revenue of around 746 billion yuan (over $114 billion), up 29%. Net income climbed more than four times to over 49 billion yuan.
