Tencent Holdings lost nearly $54B USD in market capitalization to $632B intraday on Friday as news of executive orders issued by U.S. President Donald Trump began to rattle markets and spook investors. The executive orders issued Thursday would ban transactions with Tencent’s WeChat multi-purpose chat and ByteDance’s short-form video apps. U.S. lawmakers have taken aim at both WeChat and short-form video app TikTok over the last six months, with Trump and administration officials ramping up rhetoric of potential bans over the last month because the apps are “national security risks.”
Tencent Holdings Ltd. started the trading day Friday with a value of approximately $686B, but after news of the executive order and confusion about its scope, the company lost $54B, or 7.9% of its value. Later after the White House clarified that the transaction restrictions would only affect WeChat, the company recovered approximately $20B or 3% in market valuation.
Tencent has not issued a public statement on the executive order as of this writing.
Meanwhile, TikTok owner ByteDance issued a strong statement Friday promising to fight back. The company said in its lengthy statement that even as it tried to cooperate with the Administration and the Treasury, the President has taken away its right to due process.
The statement promises legal action against the executive order:
“We will pursue all remedies available to us in order to ensure that the rule of law is not discarded and that our company and our users are treated fairly – if not by the Administration, then by the U.S. courts.”
Executive orders, particularly against platforms such as WeChat and TikTok that are considered to be used for free expression and speech, may find protections under the First Amendment. The Esports Observer detailed some of the challenges the U.S. government might face in banning TikTok in this article. TEO also spoke to Electronic Frontier Foundation General Counsel Kurt Opsahl, who spoke at length about how constitutional protections may apply to software code.
Tencent Holdings owns Riot Games, and holds stakes in Epic Games, Activision Blizzard, and many gaming and esports companies.
Tobias Seck contributed to this story.
Published at Fri, 07 Aug 2020 17:59:40 +0000