Published on March 29th, 2017 | by James Ayre0
Tencent Purchases 5% Stake In Tesla
March 29th, 2017 by James Ayre
The China-based Internet giant Tencent Holdings has purchased a 5% stake in Tesla, making it one of the top investors in the electric vehicle pioneer.
The firm reportedly paid around $1.8 billion for the 5% stake (8,167,544 shares). The stock shares were bought through the open market and also through Tesla’s stock offering last month, going by regulatory filings.
Tesla CEO Elon Musk commented on the news on Twitter, stating: “Glad to have Tencent as an investor and advisor to Tesla.” Bloomberg provides more:
“In buying the Tesla stake, Tencent is adding to existing investments in technologies that are reshaping the auto industry, including ride-hailing apps and the maps and artificial intelligence needed for driverless cars. The owner of the WeChat messaging platform could also help Musk, 45, gain more of a foothold in China, the world’s largest auto market. Tesla shares rose, approaching a record high.
“Tencent Chairman Ma Huateng said earlier this month he envisions his company developing AI technology for driverless cars in the future. The Shenzhen-based company is one of the biggest investors in Chinese ride-sharing giant Didi Chuxing and owns stakes in mapmakers NavInfo Co. and HERE, the German consortium owned by BMW AG, Audi AG, and Daimler AG.
“Tencent also was an early backer of Nio, the electric-car startup owned by Chinese internet entrepreneur William Li and originally called NextEV Inc. While Tencent has cooperated with companies it has invested in previously, there are no detailed plans for cooperation with Tesla at the moment, according to an emailed statement.”
An email sent by Tencent to Bloomberg read: “Elon Musk is the archetype for entrepreneurship, combining vision, ambition, and execution. Tesla is a global pioneer at the forefront of new technologies including electric vehicles, assisted driving, shared vehicles, digitizing real-world information, sustainable energy generation and scalable energy storage.”
For those unfamiliar with the company, it would be fair to say that the firm is amongst the three largest tech companies in China — the others being Alibaba and Baidu (which itself is certainly focused on self-driving EVs).
Interesting news — yet another bit of news contradicting the opinions of short sellers on Seeking Alpha.