Tencent buys 5% of Tesla

A 13-G announcement from Tesla seemed innocuous at first glance - SCHEDULE 13G. However, if you dug a little deeper, you suddenly discovered that the investor was none other than Tencent, the Chinese business that we know very well, through our investments in Naspers. So how much is this exactly? We worked it out, they paid for the full stake (8,167,544 shares divided by 1,777,842,836 Dollars) 217.67 Dollars a share. At the closing value last evening, the stake is worth 2.266 billion Dollars. Tencent are now officially a five percent shareholder of Tesla, which is cool from our perspective down here in South Africa. Why? As a Naspers shareholder, who owns around 34 percent of Tencent, you now indirectly own a stake in Tesla.

So how much? Well ..... Tencent has an ADR listed on the US exchanges. It has a primary listing in Hong Kong, there are 9.477 billion shares outstanding, at 227.6 Hong Kong Dollars a share, the market cap is 2.156 trillion HKD. Which in turn, translates to 277.55 billion US Dollars. The Tesla stake, at the close last evening, relative to the Tencent share price currently, is 0.81 percent of their entire value. So whilst this is a "big thing", and probably indicates for both businesses a commitment of intent, it is from a monetary standpoint, not huge for Tencent. What the tie up may mean is that Tencent (who have a massive presence in the most populous country in the world) could become just the partner that Tesla needs to expand further in China. We hold all three businesses, directly and indirectly, and there is no plan to sell any of them.