No doubt, China’s regulatory crackdown hasn’t been great for China-based tech stocks. The KraneShares CSI China Internet ETF is down nearly 50% on the year.
Yet could there be a silver lining to the new clampdown? Last Thursday, tech giant Tencent (OTC: TCEHY) announced it would spinning off most of its roughly 17% stake in JD.com (NASDAQ: JD) to shareholders. While JD.com stock fell about 6% on Thursday, Tencent was actually up by a similar amount.