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BEIJING, August 16 (TMTPOST)— Shares of Tencent-backed Chinese internet companies suffered a bruising selloff over reports about Tencent’s dumping stakes in Meituan valued hundreds of billions of dollars.

Source: Visual China

The Hong Kong-listed shares of Meituan, China’s largest food delivery platform, plunged as much as nearly 12% midday, wiping out about HK$2000 billion, and then settled more than 9% lower Tuesday. Shares of Weimob, China Literature Ltd, China Youzan Ltd, Kuaishou closed more than 15%, 7%, 4.5% and 4% lower respectively. In New York, Pinduoduo and JD.com, another two firms backed by Tencent, saw their shares" falling more than 3% and 1% respectively.

Tencent is considering a plan to sell most or all of its Meituan holdings and has engaged with financial advisors these months about the possible stake sale, Reuters cited people familiar with the matter earlier Tuesday. The plan suggested Tencent could offload 17% of stakes in Meituan, a company that the tech giant has hold shares for eight years. These stakes were worth of US$24 billion based on Meituan shares’ market close Monday. Sources of the Wall Street Journal also said Tencent is weighing to divest all or much of its stakes in Meituan, citing the government’s intention to curb the internet giants’ power.

The recent reports about cutting Meituan stakes were false, insiders at Tencent told Shanghai Securities News, one of China’s leading financial newspapers. Tencent doesn’t have any plan to sell shares of Meituan at the moment, the people added. Tencent didn’t officially comment on the reports yet, so these rumors are waiting for confirmation and the impact of sales is depend on how the company to slash its holdings, the newspaper cited analysts covering the Hong Kong equity market. The negative impact on Meituan shares is relatively softer if Tencent adopts a way like it did to JD.com, by which the WeChat owner handed JD stakes as a dividend to its shareholders, while if Tencent chooses to sell shares in the secondary market directly like it divested shares of Sea Limited, a Southeast e-commerce giant, the impact would be bigger, according to Yan Zhaojun, a strategist at Zhongtai International Securities.