Chinese stocks listed in US hammered as Beijing tightens grip
WeChat owner Tencent Holdings plunged over 7%
Chinese tech stocks listed in the U.S. were pummeled for a third day Tuesday after popular messaging app WeChat temporarily blocked new users from registering.
Tencent Holding’s WeChat, which is the only app to have over 1 billion users in China, temporarily suspended new user registration on the mainland until its security technology is updated to conform with "relevant laws and regulations," according to Reuters, citing a company statement.
|TCEHY||TENCENT HOLDINGS LTD.||43.97||+0.94||+2.18%|
WeChat expects to be in compliance in early August.
Tencent Holdings ADR fell by as much as 7.32% in U.S. trading on Tuesday, extending their three-day decline to 19.44%.
Other U.S.-listed Chinese companies, including Alibaba Group, JD.com and Baidu, have lost between 15% and 20% during the selloff.
|BABA||ALIBABA GROUP HOLDING LTD.||83.70||+2.70||+3.33%|
Investors have since Friday been dumping shares of Chinese companies after a Bloomberg report suggested Beijing would ask tutoring companies to become nonprofits, which could prevent them from going public and accepting foreign capital.
Selling snowballed on Monday after Beijing over the weekend ordered tutoring companies to become nonprofits. Other directives included ensuring online platforms that own food-delivery services pay drivers above the country’s minimum wage and give them access to labor unions.
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The new measures have spooked investors in Hong Kong, with the Hang Seng index plunging 9.51% over the past three sessions. The index, which on Tuesday closed at an almost eight-month low, is on the verge of bear market territory, down 19.29% from its February peak.