Kuaishou Technology shares fell more than 6% in early trading Tuesday as Tencent Holdings significantly reduced its ownership stake in the Chinese short-video platform.
The tech giant sold 273 million Class B shares, a move that brings its total holding in Kuaishou down to 9.37% from 15.68%.
The divestment comes shortly after Tencent led a US$3 billion funding round for Kuaishou’s artificial intelligence subsidiary, Kling AI.
The juxtaposition of a massive capital injection into the AI unit and a simultaneous reduction in equity stake in the parent company suggests a strategic recalibration by Tencent, potentially aiming to ring-fence the AI venture while taking profits on its broader video platform exposure.
Kuaishou shares had already faced pressure in Friday trading following the announcement of the nearly $2.8 billion capital injection for Kling AI.
The market’s reaction to Tencent’s stake sale indicates investor concern over the changing dynamics of the partnership and potential dilution or loss of strategic control for the video platform.