I was wondering how to calculate the number of shares that Tencent is selling in SEA.
The number of shares issued by SEA to public is around 470,000 shares. USD 208 is the selling price of SEA shares by Tencent.
However when I calculated the number of shares Tencent is selling at USD 3 billion. The number of shares turn out to be (USD 3 billion/ USD 208=1,442,3076 shares)
The amount of shares sold by Tencent seems to be higher than what SEA issued to the public
Can I clarify if I understand this correctly?
This news also seems only like a corporate action by Tencent and SEA and has no financial impact to SEA.
My assessment of SEA is that, using median price to sales of 12.97, is roughly at USD 208 based on TTM Sales per shares of USD16.02.
It doesn’t make sense for Tencent to sell at USD 208 when they could have cashed out a few months ago at USD 282.
Will you have any input to this? Appreciate any add on!
According to yahoo finance, Sea Limited has about 554.63 million outstanding shares. Tencent sold about 14.4 million stakes. 14.4m/554.63m= 2.6%
On the surface, Tencent’s sale is unlikely to have any material impact on Sea Limited.
Sea Limited stock price might not be the only factor that affects Tencent’s decision. Tencent might be forced to reduce stake in Sea Limited due to scrutiny from the Chinese regulator or perhaps China – India relationship may have hampered Sea Limited’s expansion in India ( complaints that Sea limited is under Chinese ownership and should be banned along with other apps)
We can’t say for sure, but we’re closely monitoring further developments.
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