How Short Positioning on Tencent Looked Before the Stock Tumbled

(Bloomberg) -- The sharp collapse in Tencent Holdings Ltd.’s stock in recent weeks didn’t catch everyone by surprise. Short sellers and hedgers were prepared.

The Asian social media giant had a $5.01 billion short position against it, according to data compiled by Bloomberg. That’s one of the largest publicly disclosed short positions in the world, and was held by JPMorgan Chase & Co. on behalf of an undisclosed number of clients, according to the bank’s latest disclosure on Feb. 6. Tencent has a market value of $500 billion.

The roughly 10 percent price drop started when Tencent warned investors of shrinking margins on March 21. That was soon followed by the Cambridge Analytica scandal that raised concern of the power of Internet companies. All told, almost $60 billion was cleaved off the company’s market cap.

Analysts have remained positive, nonetheless. The average 12-month target price on Tencent remains at the highest it’s been in a year. JPMorgan clients also own outright an estimated $187 billion in Tencent shares, among the company’s largest stakeholders.

Read Tim Culpan’s Gadfly column on the troubles at Tencent

A JPMorgan spokesman declined immediate comment.

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