China’s Tencent Music Entertainment Group announced a $1 billion share repurchase plan, its biggest, late on Sunday, days after the U.S. securities regulator adopted stricter measures for foreign companies listed on American stock exchanges.
It said in a statement that the Chinese music streaming company may repurchase up to $1 billion in Class A common stock in the form of American Depositary Shares within twelve months starting on March 29.
According to the US Securities and Exchange Commission (SEC), if foreign companies fail to comply with US auditing standards, they will be expelled from US exchanges, and the share prices of dual-listed companies in China, including Tencent Music, will fall sharply.
The company’s shares were further pressured on Friday after a sell off in its stock – and those of several others such as Baidu Inc and ViacomCBS Inc – by Goldman Sachs, according to an email to clients seen by Bloomberg News.
Bloomberg and the Financial Times on Saturday reported that Goldman liquidated more than $10 billion worth of stocks in these companies in block trades.
CNBC reported that the selling pressure was due to liquidation of positions by family office Archegos Capital Management.
The share price of Tencent Music, which was listed in the United States last week, fell by more than one-third.