By Sherry Qin

Shares of Tencent-backed Weimob fell sharply after the Chinese tech giant cut its stake in the cloud-computing company.

Shanghai-based Weimob's shares slid 29% as of midday Friday to 2.27 Hong Kong dollars, equivalent to 29 U.S. cents, on track for the largest daily percentage loss since the company's trading debut in early 2019.

Tencent sold a stake of about 5.45% in Weimob in the open market on Jan. 3 and Jan. 6, trimming its shareholding to 2.94%, Weimob said in an exchange filing late Thursday.

Weimob, founded in 2013, offers software services that help small and medium-size e-commerce merchants to operate and grow their businesses.

Weimob and Tencent will "continue to maintain their mutually beneficial business relationship," as the cloud-computing company will continue to be a service provider for WeChat mini shops, mini programs and Tencent advertising, Weimob said.

Weimob's share price more than doubled in late December as investors cheered a new gifting function on Tencent's WeChat platform ahead of the holidays. Using the new feature, WeChat users can give gifts of around $1,364 and under through shops embedded in the app, according to a statement. Guotai Junan analysts said then that the new function and its ease of use could drive higher user engagement and boost e-commerce sales.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

January 09, 2025 23:36 ET (04:36 GMT)

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