The share price of Afterpay Ltd (ASX: APT) rocked out of the gates today morning, opening up at $38 which is 30% higher. This happening with afterpay Share Price comes after a declaration that Chinese tech giant Tencent Holdings acquired a 5 percent stake in Afterpay over the weekend.

Tencent builds considerable shareholding

Tencent spent late March and April purchasing its 5 percent Afterpay share, worth approximately $390 million off the closing price of $29.16 on Friday. Tencent purchased market shares of Afterpay at a price range ranging between $17.11 and $31.30.

Afterpay was swift to welcome its newest major shareholder with Afterpay’s co-founders Anthony Eisen and Nick Molnar, adding that Tencent gives the company the ability to “learn from one of the most popular digital platform businesses in the world” and “tap into Tencent’s vast experience and network.”

His chief financial officer James Mitchell also commented from Tencent’s viewpoint that he has been actively investing in innovative fintech companies around the world offering unique insights into the evolving fintech markets.

In the case of Afterpay, “Afterpay’s approach stands out to us not just for its attractive business model characteristics, but also because its service aligns so well with consumer trends we see developing globally in terms of Afterpay’s customer centric, interest free approach as well as its integrated retail presence and ability to add significant value for its merchant base,” Mitchell provided its comments.

Fintech Kingdom of Tencent

As part of a duopoly with Alibaba, Tencent has potentially hit a peak market share. Although it has released its ‘WeChat Pay’ Chinese payment application in most major regions, it does not expect users worldwide to embrace WeChat Pay in place of other global rivals such as Apple Pay, Google Pay or other local apps.

Instead, Tencent took on several strategic stakes in startups. Tencent led a funding round for French mobile payment service, Lydia, for US$ 45 billion this year. The French business has been going beyond its original peer-to-peer payment systems, helping users handle their money in real time.

In addition, Tencent has co-led a financing round of US$ 115 million for French business-to-business challenger bank Qonto, and also what is supported Melbourne-based financial technology start-up Airwallex, a new network of foreign exchange payments.

Proof is that Tencent has the hunger and eye for fintech players ‘up-and-coming.’ The question is: What is next?

Now What?

We can not predict what the medium to long-term consequences of this large shareholding would be. But, as seen from today’s rise in share price, in the short term it will definitely be positive for the share price of Afterpay.

Afterpay will still be Afterpay – the leading buy now, pay later player still goes from strength to strength, right in the midst of the coronavirus pandemic.

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