Tencent Plunges, Logs Record Losing Streak But Don’t Tell Wall Street…

If there’s any stock on the planet that could have done without a global selloff catalyzed by a bloodbath on the Nasdaq, it’s Tencent.

Coming into 2018, Tencent was an investor darling. 11 months ago, the company blew past Facebook in market value, making it the first Chinese tech name to join the ranks of the world’s five largest companies.

Fast forward a year, and it’s the poster child for tech vulnerability, having fallen nearly twice as much as the Hang Seng since the January 23 peak.

On Thursday, amid the global equity malaise, Tencent plunged 6.7%. At one point, the shares were down 7.5%, which would have been the worst loss in 7 years. The shares have now fallen for 10 consecutive sessions – that is a record losing streak.

Tencent’s spiral is truly something to behold. The mammoth losses since January now easily eclipse previous drawdowns.

In August, the company turned in a rather stunning Q2 revenue miss and also recorded its first profit drop in ten years, putting pressure on the already downtrodden shares. Later that month, Tencent plunged again thanks to more worries about a sweeping crackdown on gaming in China.

The market blamed the bad Q2 in part on Beijing’s decision to freeze approvals of game licenses, leading to bottlenecks in Tencent’s pipeline. Jitters about that ongoing issue were exacerbated by a host of new government declarations aimed at fighting gaming addiction and tackling what authorities say is a worsening myopia problem in China.

Now, concerns about a global tech rout have conspired with souring sentiment around China to pile still more pressure on the shares.

As a reminder, this is bad news for emerging markets. Tencent is largest weight in the MSCI EM equities index, and as you’re undoubtedly aware, EM stocks have enough to worry about on their own without having to be concerned about this giant being cut off at the knees.