The streaming giant lost $2 billion of market value in just five days following news that Chinese regulators were cracking down on the company.
Shares of Tencent Music Entertainment (TME) fell 9.2% this week and are down 63.2% since the all-time high in March. The once-high-flying Chinese music streaming company, listed on the Nasdaq, closed at $11.70 on Friday (July 16), having lost $2 billion of market value in five days.
A string of negative news has hammered Tencent Music shares. On Friday, Morgan Stanley downgraded TME to “equal-weight” and slashed its price target from $23 to $14. The move follows news that Chinese regulators are taking a tough stance on Chinese companies listed on U.S. stock exchanges. Although Tencent Music was spared from a forced sale, China’s State Administration of Market Regulation determined on Monday that the company must sever its exclusive relationships with record labels.