Hey again. Brady here.
In one of the recent editions of The Uptake, we covered the many obstacles that Tencent has dodged or overcome over the past year and a half, and painted a rosy picture of how it still managed to make aggressive investments all over the world.
We spoke too soon!
As it turns out, the company may have to pony up and settle a nine-figure financial penalty (in yuan) issued by the Chinese government. The reason? WeChat Pay can be used too easily by folks who want to move money around for illicit purposes, or so says the Chinese central bank.
The notable thing about this fine—if it materializes—is that it will be multiples more than one might expect based on previous amounts. Read into that as you may.
There’s more. New rules are being drafted to limit the amount of time underage users can spend on WeChat and video platforms. This is a continuation of developments in August 2021, when a similar decree was issued to limit video game playtime for this age group to three hours per week.
This has led to a rapid dive in Tencent’s stock price in Hong Kong. On Tuesday, it closed more than 10% down. But look beyond the immediate, short-term impact and you’ll realize that the way Tencent does business is being fundamentally reshaped.
Mengyuan had the story. You can read her article here.
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