Tencent Holdings Ltd. now holds the title as Asia’s largest Internet company, following Alibaba Group Holding Ltd.’s 10-month slide that wiped $140.7 billion from its market value, the Wall Street Journal reported.
On Tuesday, Sept. 8, Alibaba's shares fell 4.7 percent to $60.91 in New York, valuing the online marketplace at $153 billion, which was below Tencent's value for the first time since Alibaba's initial public offering in Sept. 2014.
According to the report, Alibaba's reliance on local consumer spending in China, where it gets 83 percent of its revenue, has made it vulnerable to the slowdown in the domestic market.
In addition, Tencent bought Hollywood content for its video platform, invested in cloud computing and on-demand mobile services, as well as formed an e-commerce alliance with JD.com Inc., and all these added pressure to Alibaba.
"Alibaba's second quarter earnings weren't that impressive, whereas Tencent has bright prospects of generating money from mobile advertising," Jeff Hao, a Hong Kong-based analyst at China Merchants Securities Holdings, said. "Alibaba also gave some negative guidance for its performance for this quarter."
The report said that the decline in Alibaba's market capitalization is almost equivalent to the entire value of Samsung Electronics Co.
On the other hand, Tencent survived a three-month downturn in Chinese stocks by gaining 19 percent this year in Hong Kong trading, which rose 3.3 percent on Sept. 9, reaching a market capitalization of HK$1.26 trillion ($162 billion).
Tencent shares were propped up when the government cut last month the rates for the fifth time since November and resumed its intervention in equities.
Meanwhile, Alibaba shares went in the opposite direction, following investors' concerns about a Chinese economy heading its slowest pace of growth in 25 years.