FAST NEWS: Tencent reduces Keep Inc. holdings

The Latest: Internet giant Tencent Holdings (0700.HK) disclosed it sold 6.14 million shares of online fitness platform Keep Inc. (3650.HK) on May 2, lower its stake from 5.45% to 4.28%, according to a new Hong Kong Stock Exchange filing.

Looking Up: The sale dropped Tencent’s Keep stake below the 5% threshold that requires future disclosure of any changes in its holdings, meaning it won’t need to report any further sales.

Take Note: Such stake reductions by a major investor are generally considered a negative signal, possibly showing a lack of optimism on the company’s prospects.

Digging Deeper: Keep was founded in 2015 and launched its online fitness platform business with its own structured fitness classes. It has since gone through eight rounds of financing, raising over $600 million in total and valuing the company once over $2 billion. The company had planned to list in the U.S. a few years ago, but eventually switched to Hong Kong, where it was approved after its third application and listed on the Hong Kong Stock Exchange in July last year.

Market Reaction: Shares of Keep fell on Monday, closing down 8.7% to HK$8.73 at the midday break, 69.8% below its HK$28.92 IPO price last year.

Translation by A. Au

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