Tencent Holdings disclosed it has taken a 5 percent ownership stake in Tesla Inc (ticker: TSLA), making the Chinese mobile app giant Tesla’s fifth-largest shareholder.
Tuesday’s filing with the U.S. Securities and Exchange Commission was met warmly on Wall Street, with Tesla stock moving up 2 percent to approach levels not seen since mid-February.
Tencent filing shows it acquired 8.17 million shares of TSLA stock.
“[Tesla CEO] Elon Musk is the archetype for entrepreneurship, combining vision, ambition and execution,” Tencent said. “Tesla is a global pioneer at the forefront of new technologies including electric vehicles, assisted driving, shared vehicles, digitizing real-world information, sustainable energy generation and scalable energy storage.”
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Tencent is best-known for its popular messaging app WeChat. The Chinese government does not allow Chinese citizens to use many popular American apps while in China. WeChat is similar to the Facebook ( FB) app WhatsApp. WeChat’s user base of more than 700 million is nearly on par with WeChat’s 1.2 billion users.
Tencent and other large Chinese tech companies have been aggressively investing in U.S. technology in recent years. In addition to its new stake in Tesla, Tencent has invested in Snap ( SNAP), Weebly, Lyft, Cyanogen, Riot Games, Epic Games and a host of other American companies.
According to CBI Insights data, Tencent, Alibaba Group Holding ( BABA), Baidu ( BIDU) and JD.com ( JD) had already invested a combined $5.6 billion in 48 U.S. technology companies over the past two years prior to Tencent’s new Tesla stake.
For Tesla, funding will remain critical during the company’s highly-anticipated launch period for its Model 3. Musk has said the Model 3 launch will push Tesla’s finances “close to the edge.”
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The company plans to begin shipping Model 3s by the end of 2017. Musk has said Tesla expects to ship 500,000 vehicles in 2018. The company shipped just 76,000 vehicles in 2016 and burned through $448 million in cash in the fourth quarter.
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With Tesla Inc Investment, China Doubles Down on US Technology (TSLA) originally appeared on usnews.com
