Tencent Sheds $26 Billion as Margins Warning Spooks Market
- China’s largest company slides 5 percent in Hong Kong
- The WeChat operator intends to keep spending to chase growth
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Tencent Holdings Ltd. lost more than $26 billion of market capitalization after Asia’s most valuable company warned it will sacrifice short-term margins, spending on content and technology in pursuit of growth.
Its shares slid 5 percent in Hong Kong -- the biggest fall in over a month -- shaving some of the gains that ranked it among the world’s best performers over the past decade. The Shenzhen-based company plans to keep spending on areas from artificial intelligence to video that it says may weigh on short-term profitability but anchor long-term growth. The internet giant reported net income almost doubled to 20.8 billion yuan ($3.3 billion) in the three months ended December, beating projections.