(Yicai) Jan. 10 -- Shares of Weimob plummeted after Chinese internet giant Tencent Holdings sold over HKD632 million (USD81 million) of shares, reducing its stake in one of WeChat's largest third-party service providers to 2.9 percent from 8.4 percent.

Software-as-a-service provider Weimob's stock [HKG: 2013] fell 40.9 percent to HKD1.88 (US 24 cents) at close, after dropping as much as 41.8 percent earlier today.

The shares had more than doubled in value last month when Tencent's social media platform WeChat launched a new "Send Gifts" function allowing users to send e-commerce purchases to friends. The Dec. 19 test launch drove multi-day stock price surges for third-party service providers, including Weimob.

Tencent sold 62.1 million Weimob shares for HKD217 million on Jan. 3 and 122 million shares for HKD415 million on Jan. 6, the Shanghai-based firm announced yesterday. The reduction makes the Shenzhen-based tech giant Weimob's third-largest shareholder.

Despite the stake sale, Weimob and Tencent will maintain their business partnership. Weimob will continue providing WeChat e-commerce and Tencent advertising services, offering merchants SaaS and precision marketing solutions to promote business growth, the company said.

Founded in 2013, Weimob helps e-commerce merchants establish and operate WeChat storefronts. However, its business performance has struggled amid intensifying competition from emerging platforms such as Douyin and Xiaohongshu.

In the first half of last year, Weimob reduced operations to cut costs, with revenue falling 28 percent year-on-year to CNY867.4 million (USD118.3 million). Its adjusted net loss narrowed 81 percent to CNY46.4 million (USD6.3 million) during the same period, according to its latest financial report.

WeChat, China's largest social media platform, launched its e-commerce function in 2014. Transaction volume jumped 92 percent to a record high last year from 2023, Tencent reported without disclosing the specific amount.

Editor: Emmi Laine