Sea continued to tumble over 4% in morning trading after Tencent would cut its voting stake.
Tencent said Tuesday it is cutting its Sea stake to 18.7% from 21.3%, with its voting rights decreasing to under 10%. The move followed an earlier statement from Sea saying it is seeking to increase the voting power of its Class B shares and that Tencent would convert all such stock into Class A shares, resulting in Li becoming the beneficial owner of all outstanding Class B securities. The change, which is subject to a shareholders’ vote next month, would effectively increase Li’s voting power to about 57% from 54%.
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