FAST NEWS: BlackRock reduces Kuaishou stake to below 5%
The Latest: Asset manager BlackRock disclosed it sold about 7.8 million shares of Kuaishou Technology (1024.HK) on Oct. 24, reducing its stake in the video site from 5.05% to 4.84%, according to a new Hong Kong Stock Exchange filing.
Looking Up: The sale drops BlackRock’s Kuaishou stake below the 5% threshold that requires disclosure of any changes in its holdings. That means it won’t need to report any further purchases or sales unless the level rises above 5% again.
Take Note: Such stake reductions by a major institutional investor are generally considered a negative signal, possibly showing a lack of optimism in a company’s prospects.
Digging Deeper: Founded in 2011, Kuaishou is a leading short video sharing platform in China and was listed in February 2021 on the Hong Kong Stock Exchange. The company has lost money since its inception. But its performance has improved on forays into the higher-margin e-commerce business, rising advertising revenue and cost-cutting measures, resulting in an operating profit of 9.07 billion yuan ($1.27 billion) in the first half of this year. Its management expects the business to continue growing in the second half of the year, and is leveraging AI technology to explore creative content.
Market Reaction: Kuaishou’s shares rose on Tuesday, closing up 1.6% at HK$47 by the midday break. The stock now trades in the middle of its 52-week range.
Translation by A. Au
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