by winston » Sat Sep 08, 2018 8:31 pm
vested
Back in September 2016, Steve first told DailyWealth readers about this "little-known company." Today, more and more investors are becoming aware of Tencent. Its market cap has risen from about $250 billion back then to around $400 billion today.
Tencent has long had its hand in the world of online games. Back in 2011, the company acquired a majority stake in Riot Games (League of Legends).
The following year, it purchased a minority stake in Epic Games (Fortnite). And in 2016, Tencent bought a stake worth nearly 5% in Activision Blizzard.
Plus, Tencent has its own portfolio of games, including Fortnite competitor PlayerUnknown's Battlegrounds ("PUBG") and other mobile games for smartphones. For example, multiplayer online battle game Honor of Kings generated nearly $2 billion of revenue in China last year alone.
All told, Tencent's online-games segment made about $16 billion in revenue over the past four quarters – nearly 40% of the company's total sales.
Gaming has long been a big part of Tencent's success. And this trend still has plenty of room to run. Gaming and esports market-intelligence firm Newzoo estimates that the global games market will reach $180 billion in 2021... up from about $122 billion in 2017, or an increase of nearly 50% in just four years.
Unfortunately, Tencent's video-game segment has run into some recent headwinds...
Revenue shrunk 12% versus the prior quarter, even though it grew 6% year-over-year. The market was caught off-guard when the company posted its first quarterly decline in profits in more than a decade.
Plus, Chinese regulators recently halted the sale of one of Tencent's games. The Chinese government has even outlined plans to limit the amount of time kids spend playing online games.
As a result, Tencent shares have pulled back, and we've stopped out of the position across some of our publications. But that doesn't change our long-term thesis that Tencent will become a household name one day soon... and potentially make investors a fortune along the way.
Source: Daily Wealth
It's all about "how much you made when you were right" & "how little you lost when you were wrong"