China's Tencent Music jumps 11 percent in US debut

Andrew Cummings
December 15, 2018

Chinese streaming giant, Tencent Music's much talked about U.S. IPO is finally here, with the company announcing a $1.1 Billion raise in the same.

Tencent Music will trade on the New York Stock Exchange under the symbol "TME".

China's largest music-streaming service, which is backed by Tencent, and current holders sold 82 million American depositary shares at $13 apiece, according to a statement. The filing said that the music-streaming company sold 41 million American Depository Receipts (ADRs), while existing shareholders sold another 40.9 million.

Shares rose more than 9 percent to $14.20 apiece at 1:45 NY, valuing the company at about $23.25 billion - just below the market valuation of Spotify Technology SA, its dominant counterpart in the U.S. Spotify is also one of the key investors of Tencent Music.

The company initially planned to launch the deal in October, but given a recent plunge in global markets and the tension between USA and China, the company chose to postpone the IPO. Tencent Music opted to price lower after initially guiding fund managers that orders were coming in around the midpoint of the marketed range.

That is the highest amount since 2014, the year of Alibaba Group Holding Ltd.'s record US$25 billion offering.

Since it publicly filed with the Securities and Exchange Commission in early October, stocks around the world careened. On our platform, social interactions such as sharing, liking, commenting, following and virtual gifting, are deeply integrated in our products and highly complementary to the core music experience, thereby enhancing our user experience, engagement and retention.

Tencent Music's US IPO is the fourth biggest among Chinese firms this year by arrangement esteem.

Tencent Music will debut at a valuation of about $21.3bn, falling short of the $23.3bn of Spotify Technology SA, the Swedish peer that's also an investor in the Chinese company.

With gushing applications QQ Music, KuGou, Kuwo and in addition karaoke application We Sing, Tencent Music is China's biggest online music stage flaunting in excess of 800 million dynamic clients month to month. It also can not be discounted that Tencent's immensely popular messaging app WeChat has played a critical role in increasing Tencent Music's outreach. By comparison, Spotify lost a net $520m.

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