Tencent Boss Loses $14 Billion in Rout, More Than Jack Ma

(Bloomberg) - It turns out that even the most compliant Chinese billionaires are not immune to the regulatory attack that is gripping the world's second largest economy.
In a twist that has turned traditional beliefs about the political pecking order of the Chinese business elite on its head, the meek boss of Tencent Holdings Ltd., Pony Ma, has lost more paper fortune than Jack Ma, the combative fellow campaigner, in the past nine months. Founder of Alibaba Group Holding Ltd. and the Ant Group Co.
The reversal underscores how quickly Beijing's crackdown on crackdowns has expanded since authorities thwarted Ant's public offering on November 3rd. What initially looked like a targeted campaign against China's most outspoken technology tycoon has since expanded to almost every corner of the industry and beyond, as regulators de-emphasis on unrestrained growth in favor of other priorities like data security, financial stability, and reducing inequality.
During most of China's nine-month campaign to rule the big tech, Tencent appeared to have fared much better than its archenemy, aided in part by Pony's reputation for staying out of the spotlight. While Alibaba was fined a record $ 2.8 billion in antitrust fines, regulators only fined Tencent token token for failing to seek approval on previous acquisitions and investments. His music arm was recently ordered to give up exclusive streaming rights despite escaping the doomsday scenario of the business being wound up.
But a damning state news report on Tuesday turned the tables. Tencent stock posted its largest intraday decline in a decade after a Xinhua-related newspaper targeted the company's main gambling business, fueling speculation that it could become the next target of Beijing's crackdown. The defeat left the company, whose market capitalization briefly hit $ 1 trillion earlier this year, valued at $ 550.5 billion.
According to the Bloomberg Billionaires Index, Pony's net worth has declined nearly $ 14 billion since Ant's public listing in November, falling to $ 45.8 billion on Tuesday. He is now third on the list of the rich in China, behind Jack, with a net worth of $ 47.8 billion.
While state media toned down their language on Wednesday and helped Tencent recover more than 5%, the stock is still 17% lower for the year. The outlook will largely depend on what is expected next from regulators, who shocked investors late last month with a crackdown on tuition from companies that will force many of them to become nonprofits.
Tencent is already in the process of reassuring Beijing, promising to further limit playtime for minors and ban in-game purchases for the youngest players. The company also raised the possibility of the industry completely banning games for anyone under the age of 12.
(Updates with details on regulatory measures in the fourth paragraph)
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