A filing at the Securities and Exchanges Commission reveals that China’s Tencent Holdings Ltd has purchased a five percent stake in U.S. electric car maker Tesla Inc. Tencent, Asia’s second most rated tech firm, shelled out approximately $1.7 billion for 8,167,544 shares, making it one of Tesla’s biggest shareholders.
An upward tick in the value of Tesla’s share price following news of the purchase has increased the market value of Tencent’s shares to approximately $2.2 billion at the latest market value. Tesla’s shares rose 2.7 percent to $277.45 on Tuesday.
With this deal, Tencent expands its portfolio and clout in the autonomous vehicle sector. Tencent is best known for its WeChat mobile messaging app, and has a market capitalization of about $275 billion, in comparison to Tesla’s 45 billion.
Tencent has also invested in Didi Chuxing, the world’s second-largest ride services company behind Uber (currently in the process of purchasing Uber China), and in Lyft, Uber’s main U.S. rival. The company is also an early investor in Snap (formerly Snapchat Inc).