Tencent Holdings tumbled by the most in seven weeks amid speculation its controlling shareholder, Naspers-controlled Prosus, may speed up selling shares in the Chinese internet giant.

Prosus plans to deposit an additional 96 million of the Tencent shares into the Hong Kong stock clearing system. Such a move may signal that it may accelerate their selling in the company, even though Tencent has been repurchasing shares to offset the downward pressure, according to traders. Tencent fell as much as 4.9% to HK$358 on Wednesday, the most since 21 February.

“It’s likely that Prosus will speed up their selling of Tencent shares when it’s near the level of HK$400,” said Steven Leung, UOB Kay Hian executive director. “Tencent has been buying back their shares to offset the market impact of big holders selling every day, but still such negative news would always cause some concern.”

As of January this year, Prosus had sold more than 193 million Tencent shares for net proceeds of US$7.2-billion, cutting its stake to about 26.9% from 29% in June 2022 when it first announced the selloff plan.

Tencent has been buying back its shares almost every trading day since 27 March, after suspending that for more than two months. Its buybacks earlier didn’t manage to stem the share declines when the market was concerned about Chinese regulatory crackdown and Covid’s impact on the economy.

Shares of Tencent have rebounded 90% from its October low. The company’s plan to develop a ChatGPT-like bot and Beijing’s resumption of game approval have been supporting its shares.

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“Tencent’s share price always takes a hit when there’s news of Prosus selling,” said Vey-Sern Ling, MD at Union Bancaire Privee. “But the sale doesn’t affect the fundamentals of the Tencent.” — Jeanny Yu, with John Cheng, (c) 2023 Bloomberg LP