Tencent (TCEHY) has taken a series of other diversification initiatives to beat the stock price loss. Tencent announced an investment agreement worth $317.6 million in Bilibili on October 3. Bilibili is China’s foremost online entertainment platform for youth. Tencent will have an ownership 12.3% in Bilibili, according to the agreement.
The above events came shortly after Tencent’s strategic restructuring announcement on October 1. Tencent formed Platform & Content Group to develop QQ, Qzone, YingYongBao, and Tencent Browser. Users have access to music, blogs, photos, and videos in Qzone. Tencent also built the Cloud & Smart Industries Group to drive Tencent Cloud, Tencent Map, Smart Retail, and Youtu Lab. The restructuring was Tencent’s response to Alibaba (BABA) and Baidu’s (BIDU) growing cloud computing capabilities. Recently, we saw how Alibaba’s AutoNavi crossed 100 million daily users and likely beat Baidu Maps.
Tencent announced a partnership with China’s billion-dollar coffee startup Luckin on September 6. The connection was intended to tap China’s ~$15 billion coffee market. The announcement came shortly after Alibaba’s alliance with Starbucks (SBUX).
Tencent, Alibaba, and Baidu have lost 25%, 10.3%, and 12.2% in stock value YTD (year-to-date). The loss in the stock value was in contrast to the FAANG stocks. Only Facebook (FB) noted significant stock value loss. Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOG) recorded YTD stock value gains of 32.5%, 61.6%, 83%, and 10.6%, respectively.