Why Tencent Music Entertainment (TME) Stock Is Down 8%

Tencent Music Entertainment Group TME shares fell 8.10% to $10.62 Tuesday afternoon as concerns over intensifying U.S.-China relations sparked a broader selloff in Chinese equities.

What To Know: President-elect Donald Trump's reported consideration of China hawks Marco Rubio and Mike Waltz for key administration roles has raised fears of a more aggressive U.S. stance, which could result in heightened scrutiny of Chinese tech firms operating in the U.S.

TME, a major player in China’s online music and entertainment sector with streaming platforms like QQ Music and Kugou Music, depends heavily on cross-border digital licensing deals, and increased trade restrictions or new regulations could complicate its access to international content and partnerships.

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Additionally, weak credit data released in China heightened investor concerns about sluggish domestic demand, which is critical for TME's growth.

October's loan growth came in below expectations, signaling that Chinese consumers may be tightening their spending—a worrying trend for TME, which relies not only on ad revenue but also on in-app purchases and paid subscriptions to boost revenue.

Slowing consumer demand in China could make it harder for TME to grow its paying subscriber base, a key metric in its long-term strategy to diversify beyond free-tier streaming services.

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How To Buy TME Stock

Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in Tencent Music Enter Group’s case, it is in the Communication Services sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.

According to data from Benzinga Pro, TME has a 52-week high of $15.77 and a 52-week low of $6.76.