Tencent Music Announces Record $1B Buyback Amid Selloff

Tencent Music Announces Record $1B Buyback Amid Selloff

Tencent Music Entertainment Group (TME) said Sunday that it had authorized a $1 billion share repurchase program during a twelve-month period starting Monday.

What Happened: The Shenzhen-based company said it may purchase up to $1 billion of its Class A ordinary shares in the form of American depositary shares during the period. The repurchase would be the company's biggest ever, as per Reuters.

“The Share Repurchase Program is a strong indication of the Board's confidence in the Company's business outlook and long-term strategy, and we believe it will ultimately benefit TME and create value for its shareholders,” said Tong Tao Song, chairman of the board.

Tencent Music shares have fallen 33.92% in a seven-day period leading up to Friday’s closing when the shares closed 1.23% lower at $20.10. The shares fell another 1% in the after-hours trading to $19.90.

Why It Matters: The fall in Tencent Music shares mirrors similar declines in dual-listed Chinese companies after the United States Securities and Exchange Commission said it would force delisting of such firms should they not provide access to their books.

On Friday, shares of Tencent Music Entertainment Group, Baidu Inc (BIDU), and others came under pressure after it was revealed that Goldman Sachs Group Inc GS sold $10.5 billion worth of shares of companies ranging from Chinese tech giants to U.S. media conglomerates.

Other companies that came under pressure included Viacom CBS, which trades as CBS Corporation (VIAC), and Discovery Communications Inc (DISCA).

Goldman Sachs, Morgan Stanley (MS), Credit Suisse Group AG (CS), and Deutsche Bank AG (DB) forced Archegos Capital Management to liquidate positions in the Chinese internet names, CNBC reported Sunday.

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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