Marathon Cuts $11.3 Million From Tencent Music Stake Even With Shares Up 37% in a Year
Key Points
Marathon Asset Management sold 559,011 shares of Tencent Music Entertainment, an estimated $11.34 million trade based on quarterly average prices in the period.
Meanwhile, the quarter-end position value fell by $26.44 million, reflecting both trading activity and price appreciation.
As of December 31, Marathon reported holding 2,305,413 TME shares valued at $40.41 million.
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On February 6, Marathon Asset Management disclosed in a U.S. Securities and Exchange Commission (SEC) filing that it sold 559,011 shares of Tencent Music Entertainment (NYSE:TME) in the fourth quarter, an estimated $11.34 million trade based on quarterly average pricing.
What happened
According to a filing with the U.S. Securities and Exchange Commission dated February 6, Marathon Asset Management sold 559,011 shares of Tencent Music Entertainment during the fourth quarter. The estimated transaction value was $11.34 million, calculated using the average closing price for the quarter. Meanwhile, the quarter-end value of the position decreased by $26.44 million, a change that incorporates both share sales and stock price movement.
What else to know
Following the sale, the position accounted for 1.55% of Marathon Asset Management Ltd’s 13F reportable AUM.
Top five holdings after the filing:
- NASDAQ:AMZN: $116.93 million (4.50% of AUM)
- NASDAQ:GOOGL: $115.71 million (4.45% of AUM)
- NYSE:CNH: $109.88 million (4.23% of AUM)
- NASDAQ:CCEP: $102.23 million (3.93% of AUM)
- NYSE:SCCO: $92.81 million (3.57% of AUM)
As of February 5, shares of Tencent Music Entertainment were priced at $15.93, up 37.2% over the past year and outperforming the S&P 500 by 25.05 percentage points.
Company overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $4.57 billion |
| Net income (TTM) | $1.56 billion |
| Dividend yield | 1.11% |
| Price (as of February 5) | $15.93 |
Company snapshot
- Tencent Music Entertainment operates leading music streaming, online karaoke, and live entertainment platforms in China, including QQ Music, Kugou Music, Kuwo Music, and WeSing.
- The company generates revenue through music subscriptions, virtual gifts, advertising, live streaming, and music-related merchandise sales.
- It targets mass-market Chinese consumers seeking digital music, interactive entertainment, and social engagement experiences.
Tencent Music Entertainment is a major digital music platform in China, leveraging a diversified product suite and strong technology infrastructure to capture a broad user base. The company’s integrated ecosystem and partnerships enable it to monetize both content and user engagement through multiple channels. Its scale and affiliation with Tencent Holdings provide strategic advantages in distribution, user acquisition, and content sourcing.
What this transaction means for investors
Tencent Music’s fundamentals have quietly strengthened just as the stock has re-rated higher, though not without some intense volatility along the way. In the fourth quarter alone, for example, shares fell close to 25%, likely forcing portfolio managers to make harder allocation decisions. And after a year in which shares climbed more than 37% overall, trimming exposure can be as much about discipline as doubt.
Operationally, Tencent Music continues to execute. In its most recent quarter, revenue rose more than 20% year over year, driven by a fast-growing subscription base and higher average revenue per paying user. Music subscriptions climbed at a double-digit pace, while profitability expanded even faster, with net income jumping more than 36% year over year. Gross margins improved, operating leverage increased, and the balance sheet remained flush with over $5 billion in cash and short-term investments.
Against that backdrop, this sale looks less like a negative call on the business and more like portfolio management. Tencent Music remains a meaningful holding, but it sits alongside larger positions in mega-cap names such as Amazon and Alphabet, suggesting capital is being rebalanced toward diversified global exposures rather than concentrated growth bets.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Amazon. The Motley Fool has a disclosure policy.
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