U.S. President Trump signed an executive order on the 6th local time, announcing that it will prohibit any U.S. individual and company from conducting any transactions with TikTok’s parent company ByteDance after 45 days, and prohibit U.S. individuals and companies from conducting any WeChat-related transactions with Tencent. transaction.
Since the above administrative order did not specify in detail, some foreign media interpreted this administrative order as a ban on Tencent and WeChat, but some foreign media interpreted it as a ban on WeChat only and did not involve other Tencent businesses.
For this emergency, Tencent has not yet publicly responded, only that it is evaluating the administrative order internally to gain a full understanding.
Affected by the news of the ban, today, Tencent’s share price opened all the way down. At one time, it fell by nearly 10% during the intraday session, and then the decline gradually narrowed. As of the close, Tencent’s share price was quoted at HK$524, a decrease of 5.67%.
Some analysts said that if only WeChat is blocked, Tencent will not be affected too much . As far as the use of WeChat in the United States is concerned, at present, overseas WeChat is mostly used in the American Chinese circle, mainly to facilitate contact with domestic relatives and friends, and WeChat payment is mainly used for Chinese tourists.
According to media reports, the Chinese American community has begun to prepare for the ban on WeChat by transferring contacts to social platforms such as line and Telegram.
However, if the ban spreads to Tencent, it may cause far-reaching two-way effects .
Tencent holds shares in several US companies. In the game field alone, Tencent holds 100% of the “League of Legends” developer Riot Games, the “Fortnite” developer Epic Games 40% of the shares, and the well-known game developer Activision Blizzard 5% of the shares. Tencent also holds a 5% stake in Tesla, a well-known auto manufacturer.
In the past two years, Tencent’s games have enjoyed a strong overseas development momentum. Many games have long dominated the app stores of Apple and Google, bringing great profits to Tencent. In Q4 2019, Tencent’s overseas game revenue approached 7 billion yuan, of which a large part From the US market.
In addition, Tencent Music, a business of Tencent, has been listed in the United States. Tencent-owned companies such as Sogou, Douyu, Pinduoduo, JD.com, and Weilai are all listed in the United States.
At present, another company affected by the ban, ByteDance, has taken the lead in issuing a statement stating that “this latest executive order issued by the President of the United States does not follow due process. We are very shocked by this.” and said “if The U.S. government cannot treat it fairly, and it will resort to U.S. courts.”
Some people in the legal profession said that in view of the lack of facts and legal support for the actions of the US government, using US law to prevent or delay the implementation of the ban is a possible and effective method. But it does not rule out that the US government will force Apple and Android app stores to delete apps such as WeChat and TikTok.
How Tencent will respond is currently unknown.
In any case, this is a test for Internet companies such as Tencent that are striving to expand their international business.
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