Tencent buys 5% share in Tesla, becoming one of the company’s largest shareholders

2016 had been a great year for Tencent as it experienced its highest revenue jump since 2012

Asian tech giant Tencent has just bought a five per cent share in Tesla, according to several media reports, making it into one of the largest shareholders in the American automaker.

Based on information in a US regulatory filing, Tencent has purchased 8,167,544 shares for around US$1.7 billion.

Apart from gearing up Tesla for the launch of its Model 3 later this year, analysts stated that the investment could help the automaker sell or even build cars in China.

In a series of tweets, Tesla CEO Elon Musk stated that he was “glad” to have Tencent as investor and adviser, adding that there are “very few” Model 3 orders from China, despite being the world’s largest market for cars.

Also Read: VIDEO: Tencent’s Ma Huateng proposes to build South China’s version of Bay Area

Tesla’s stock has risen for 3.6 per cent on Tuesday. However, Bloomberg noted that it remains “less than six per cent away from its all-time intraday peak”, with its market cap “roughly” US$1 billion below automaker giant Ford.

Tencent itself has recently released its Q4 2016 and annual results, where it reported a net profit of RMB41.45 billion (US$6 billion) for 2016, up 42 per cent from the previous year. It has been the company highest revenue jump since 2012.

It has recently invested in video-streaming platform Kuaishou, which has been reported to have an eye for a US IPO this year.

Tencent has also been rumoured to consider investment in Indonesian ride-hailing giant Go-Jek.

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