9 Sept 2021
NetEase and Tencent Shares Collapse as China Froze the Approvals of New Games
The Index Today
Shares of NetEase and Tencent Holdings Ltd collapse on Thursday due to the freezing of the new game approvals in Beijing, according to the report from South China Morning Post.
According to the news, Tencent closed at 8.4% lower in Hong Kong and NetEase fell 7% in premarket trading on Nasdaq, in response to the extra pressure being exerted on the companies as Beijing pursues a broader crackdown aimed at bringing powerful tycoons to heel and curbing income inequality.
The decision had a descending impact on shares of other Chinese companies. Pinduoduo traded 4% lower in premarket, Alibaba ADR 3.3%, JD.com ADRs fell 4.3% and Didi Global ADRs fell 3.7%.
This is not new to the Tencent and NetEase as they already have struggled with such bans before. In the previous reports, last 2018 the authorities froze new game approvals on concerns that playing online games was hurting children’s eyesight.