Kuaishou-W's stock price plummeted 5.96% during intraday trading on Tuesday, following news that its largest institutional shareholder, Tencent Holdings, significantly reduced its stake in the company.

The sharp decline came after Tencent sold approximately 272.9 million Class B shares in Kuaishou via an off-market block trade, reducing its shareholding from about 15.68% to approximately 9.37%. This transaction ends Tencent's status as a substantial shareholder in Kuaishou and represents a substantial divestment that could be valued at up to $1.6 billion.

Kuaishou stated that it does not expect the share sale to have any material adverse effect on its operations and emphasized that Tencent has expressed continued confidence in the company's long-term prospects. Market analysts view this move as part of Tencent's broader strategy to optimize its investment portfolio and reallocate capital toward artificial intelligence and other emerging technology sectors.