A rival of the Chinese version of TikTok is reportedly getting readu to launch an initial public offering which is expected to be the largest IPO of the world since the beginning of the novel coronavirus pandemic.
The Beijing based short video sharing app company Kuaishoum us targeting to raise as much as $6.2 billion in a stock market listing in Hong Kong, according to reports citing data from details of the planned IPO obtained from the deal.
Kuaishoum, which in Chinese means “fast hand”, wants to issue about 365 million shares priced between 105 and 115 Hong Kong dollars ($13.55 and $14.84). At the top of that range, it would raise 42 billion Hong Kong dollars, or $5.4 billion. Issuing more shares in an over-allotment option could bring its haul to $6.2 billion.
According to data provider Refinitiv, that would be the largest IPO of the world since the IPO launched by the Saudi Arabian oil giant Saudi Aramco which broke all records with an $30 billion raise in December of 2020. Refinitiv data also showed that the planned IPO of Kuaishoum will also be the largest tech IPO of the world since the May 2019 listing of Uber in which the ride hailing company raised more than $8 billion.
Users of Kuaishou are allowed to shoot short-form videos and then live stream the content on the app. The live-streaming business of the company generates most of its revenues as the app allows its users to purchase virtual items and then give them out as presents to their favorite hosts. According to a prospectus filed by the company at the Hong Kong Stock Exchange, about 84 per cent of the company’s revenues in 2019 was generated from its live-streaming transactions. It also makes money off of online advertising.
The company expects to price its shares by the end of this week, and list them on February 5.
There were no comments available from Kuaishou on the IPO.
Founded 10 years ago, this short video sharing app has the financial backing of the Chinese social media and gaming giant Tencent. Kuaishou is amongst the largest short video sharing apps in China. According to the company’s prospectus, it had about an average of 264 million daily active users for the 11 months through November.
That number is however much smaller than the industry leader ByteDance whose short video sharing app and the Chinese version of TikTok – Douyin, boasted of having more than 600 million daily users in August, said reports citing information from the company.
In its prospectus, Kuaishou mentioned “the fact that the internet business is highly regulated in China” as a potential risk.
Promises of investing $2.45 billion in Kuaishou have already been made by ten cornerstone investors which include names such as Temasek, BlackRock, GIC, the Abu Dhabi Investment Authority, Fidelity and Invesco.
(Adapted from CTVNews.com)