- Tencent stock tanked as much as 10% on Friday following President Trump’s executive order targeting its WeChat app.
- The order arrived in tandem with a similar order against ByteDance’s TikTok app. Both Chinese companies face a ban from US transactions set to take effect in 45 days.
- The orders escalate tensions between the world’s two largest economies as US investors continue to grapple with economic recession and waning hopes for fresh stimulus.
- Other Chinese tech giants slumped on news of the orders. The Hang Seng Tech index, which tracks the 30 largest tech firms listed in Hong Kong, closed 2.5% lower through the session.
- Watch Tencent trade live here.
Shares of Chinese tech giant Tencent plunged as much as 10% on Friday after President Donald Trump issued executive orders against popular apps WeChat and TikTok.
The orders are set to bar US transactions with Tencent and ByteDance, which own WeChat and TikTok, respectively. The bans will take effect in 45 days and escalate tensions already lingering between the US and China.
The Trump administration alleges both companies track “vast swaths” of Americans’ data and threaten their privacy from the Chinese government.
Tencent traded near record highs prior to the order. The company is among China’s largest tech firms, and its Friday tumble dragged on peer firms. Xiaomi,ZTE, and Alibaba all traded lower through the session following Trump’s order. The Hang Seng Tech index, which tracks the 30 largest tech companies listed in Hong Kong, closed 2.5% lower.
Tencent pared losses through the session and closed roughly 5% lower.
Trump first targeted TikTok in late July, calling on the company to sell its US unit or end operations in October. Microsoft confirmed on Sunday it was in talks to acquire the social media giant’s operations in the US, Canada, Australia, and New Zealand. Trump has since demanded the Treasury Department take a cut from the deal, should it close.
Tensions between the economic superpowers flared earlier this summer after the White House ordered the closure of China’s consulate in Houston. China fired back soon after, calling on the US to close its own consulate in Chengdu.
Hopes for a mild truce emerged earlier this week following reports that US and Chinese officials would meet in mid-August to discuss their “phase one” trade deal. Yet the Thursday executive orders mark a new front for the countries’ shaky relationship.
Tencent closed at 527.50 Hong Kong dollars ($US68.06) per share on Friday, up 41% year-to-date.
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