The Chinese internet giant has tumbled 25percent from its January peak, erasing about $143billion (R1.8trillion) of market value. This is the biggest wipe-out of shareholder wealth worldwide, as measured from the date of each stock’s 52-week high. Facebook, the F in the FANG block of mega-cap US tech shares, is the second-biggest loser, with a $136bn slump over the past three trading sessions.
Investors are beginning to question whether the best days are over for technology stocks - the leaders of a nine-year boom in global equities.
Tencent, Asia’s second-largest company after e-commerce behemoth Alibaba, has also been dogged by concerns that growth in its mobile-gaming unit is slowing. The stock, down 3.3percent yesterday and 9.8percent in July, capped its biggest monthly retreat since 2014.
“Investors are increasingly pricing in lower expectations for Tencent’s interim results,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. “Overall, tech companies are facing a similar problem. They have been enjoying fast profit growth in the past few years, so it will be difficult for them to maintain similar growth in the future as the competition grows and some segments are saturated.”