author: Zuzanna Domeradzka
Tencent Lost Hundreds of Billions of Dollars; Chinese Giant Trembles
China's largest tech giant has been outperformed in its home country. Tencent has lost more than $650 billion in recent years.
Tencent was until recently the largest technology giant, and at the same time a publisher of video games (e.g. Avatar: Reckoning, Don't Starve: Newhome) in China. Recently, it had to bid farewell to that position dues to huge financial losses.
Until a few months ago, Tencent was spending money left and right, buying up shares in companies such as FromSoftware, Guillemot Brothers Limited and Ubisoft. However, on October 20 the value of the giant's shares fell by a little more than 5 percent, to around 29.6 U.S. Dollars. According to Bloomberg news agency, this is the lowest value since 2017 (via Game World Observer).
Moreover, this means that Tencent has lost more than $650 billion of its stock market capitalization since January 2021. And the giant was approaching $1 trillion at the time. It is currently valued at $293.3 billion.
Such losses have led Tencent to be surpassed in terms of revenue in China by another giant, Kweichow Moutai. It is known mainly for the production and sale of liquor.
Tencent's crisis is mainly related to China's strict covid policy, as well as any delays caused by the government. Analysts predict that the giant will report a drop in net profit of as much as 34 percent in the last quarter of this fiscal year. Tencent is so far "coping" with the crisis through massive layoffs of employees and closing of some branches.