Tencent Ecosystem Member WeiMob's Stock Experiences Roller Coaster Ride
WeChat might be banned in the US, but its ecosystem developers like Weimob will keep going, as WeChat's home game is in China, not the other side of the Pacific.
After United States President Donald Trump signed the executive order of banning the China-based social media platform WeChat, the stock of the owner of the platform, Tencent (00700:HK), responded instantaneously with HKD 30 billion losses and is only slowing climbing back.
Previously recommended with a buy by EqualOcean, the stock price of Weimob (02013:HKEX), the Chinese echo to Shopify (SHOP:NYSE), slumped 10% after the market opened with the WeChat banning order. Weimob being a WeChat ecosystem member company, its market performance was inevitably affected by the blow to Tencent. At the time of publication, Hang Seng Tech Index had dropped over 3% for the day.
WeChat has over 1,100 million users worldwide but most of them are located in China. The instant message app is also a mega app that integrated functions like moment sharing, video chat, in-app games, e-marketplaces, e-payment, and so on. As a social media platform, WeChat creates an ecosystem for users and developers. The banning order’s influence on Tencent’s operation can be contained, as its biggest market is still China.
From Huawei, TikTok to WeChat, the US leader has been widening his 'China Tech Attack.' Banning orders have come one after another – for many commentators, these were issued without solid evidence to support them. The uncertain geopolitical maneuvers rocked the tech market. Hong Kong tech shares started low following the recent news and are now fluctuating and slowly rising on a small slope.