Why Huya Stock Took a Hit Monday

What happened

China-based game-streaming platform company Huya (NYSE: HUYA) saw its stock pull back on Monday, falling as much as 14.6%. Shares finished the trading day down about 12.2%.

The stock’s decline comes amid a broader decline on Monday among Chinese internet stocks. Some investors were spooked when The Wall Street Journal said President Trump plans to stifle investment from Chinese businesses in U.S. technology companies and block technology exports to Beijing. The Journal cited “people familiar with administration plans” as its sources for the story.

Image source: Getty Images.

So what

While Huya doesn’t market its online game-streaming platform in the U.S., macroeconomic factors resulting from a potential trade war could negatively impact business. Further, Huya listed its ability to “explore strategic investment, acquisition and overseas expansion opportunities” as one of its business strategies in its F-1 filing earlier this year.

Trade tensions in the U.S. could make these initiatives more difficult.

Huya stock has also been on a roll since its IPO earlier this year, making the stock more susceptible to a pullback. Even after today’s decline, Huya stock is up about 100% since going public in May.

Now what

If these new stipulations come to fruition, they may limit companies with 25% or greater Chinese ownership from buying U.S. companies the White House deems “industrially significant technology,” said the Journal.

These new rules could be announced by the end of the week, the sources said.

10 stocks we like better than HUYA Inc.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and HUYA Inc. wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of June 4, 2018

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

You May Also Like

About the Author: Over 50 Finance