Bronx, United States, Aug 10, 2020, 06:00 /Comserve / -- China's Tencent Holdings Ltd. has lost more than 10% of its share after U.S. President Donald Trump signed an executive order banning US transactions with Tencent company, the owner of WeChat.
Washington D.C., August 7, 2020: China's Tencent Holdings Ltd. has lost more than 10% of its share after U.S. President Donald Trump signed an executive order banning US transactions with Tencent company, the owner of WeChat. More than USD 45 billion was wiped off from the Chinese firm's market value following the order.
WeChat is a popular multi-purpose messaging, mobile payment, and social media app in China. It was first launched in the year 2011 and soon became the world's largest standalone mobile application to achieve more than 1 billion active users. In June 2020, this app was banned in India due to privacy and security reasons. Following the alleged concern over security, the U.S. President Donald Trump also ordered for its ban on August 6, 2020.
According to Paul Triolo, the Eurasia Group analyst, such presidential action over banning apps has never been implemented hitherto and there is a possibility that the order might face legal challenges.
According to different published sources, Tencent was ranked as the world's largest gaming publisher by revenue. It has also collaborations with some of the leading American gaming corporations like Activision Blizzard Inc. and Electronic Arts Inc. Tencent holds a large stake in Epic Games Inc., the publisher of Fortnite, and owns 'League of Legends' developer Riot Games Inc. Both companies are headquartered in the United States.
WeChat and its sister application Weixin are hugely popular messaging app in mainland China. It is used by many expatriates to stay in touch with their family and friends back home. It is believed that this order against Tencent might hamper the business relationships between the U.S. and China as earlier a similar app called TikTok was banned by the Trump administration.
While the US user data is stored in Canada, the Chinese Government has claimed that WeChat does not store its international user's data in China. However, this claim of Chinese officials is not verified.
About Tencent/WeChat
Tencent Holdings Ltd. is a multinational conglomerate company founded in the year 1998. It is the owner of WeChat and is headquartered in the Nanshan district of Shenzhen, China.
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