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Tencent Music launches $1.2bn US IPO, third largest by a Chinese company this year

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According to the United States Securities and Exchange Commission, Tencent Music Entertainment launched its largely anticipated U.S. initial public offering (IPO) of up to $1.2 bn on Monday 3 December. It tossed after global stock markets were boosted by a treaty brokered by U.S. and Chinese leaders in their trade conflict.

The company will sell 82 million American depository receipts in a range between $13 and $15 each. Tencent Music could sell an additional 12.3 million shares if an over-allotment option is exercised. According to a source close to Reuters TME will begin trading shares on 12 December 2018.

The Tencent Holdings subsidiary had originally planned to launch its American IPO in October, but delayed as fellow tech companies experienced global market selloffs. The $1.2 bn entry is significantly more conventional than the earlier reported $2 bn target, though the company never confirmed that figure.

Tencent Music boasted 800 million total unique monthly active users in the third quarter with the average user spending over 70 minutes a day on the company’s platform. The company reported revenue of about $2 bn through the first three quarters of the year. Tencent Music owns streaming apps QQ Music, Kugou and Kuwo as well as karaoke app WeSing. Tencent Music, which has a cross-shareholding deal with Spotify, offers more in the way of socially interactive services that makes it profitable.

At $1.2 bn, the IPO would still be one of the largest by a Chinese company in the United States this year, behind the $2.4 bn raised by video streaming company iQiyi in March and the $1.6 bn gathered by online group discounter Pinduoduo in July.

 

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Abhishek Singh

Author: Abhishek Singh

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