Tencent Music Rises 7.7% in Trading Debut -- WSJ
December 13 2018 - 3:02AM
Dow Jones News
By Maureen Farrell
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (December 13, 2018).
Investors sounded notes of optimism about Tencent Music
Entertainment Group, one of the biggest IPOs in the U.S. in recent
years, pushing its shares 7.7% higher in the company's trading
debut.
A positive first day was welcome for the Chinese music-streaming
company, traded under the symbol TME, after it had delayed its
initial public offering by several months because of the market's
recent volatility and then priced at the low end of its expected
range.
"We're very proud to be able to go public despite the very
challenging market," Tencent Music's chief strategy officer Tony
Yip said Wednesday in an interview at the New York Stock
Exchange.
The company's American depositary shares closed at $14 apiece,
up from their IPO price of $13. To sound the company's opening
trade around 11:30 a.m., Tencent Music executives clanged on a bell
with wooden gavels on the floor of the New York Stock Exchange.
Wednesday's performance for Tencent Music was buoyed by a rise
in stocks more broadly. The tech-heavy Nasdaq Composite ended the
day up about 1%, and the S&P 500 rose 0.5%.
Tencent Music's IPO is likely the last big debut in what has
been a banner year for initial public offerings. 2018 has seen the
highest number of IPOs and most money raised in total during IPOs
since 2014. So far, 227 companies have raised $60.4 billion on U.S.
exchanges, up 22% from this time last year, when 189 companies had
raised $49.4 billion, according to Dealogic.
Companies that have gone public in the U.S. this year are
trading up 5.3% on average from their IPO price, and technology
companies are up 6.3% on average, Dealogic data show. By
comparison, this year the Nasdaq is up 2.8% and the S&P 500 is
down 0.8%.
Still, investors and bankers expect that next year will be even
busier than 2018 with several mammoth companies planning IPOs,
including Uber Technologies Inc., Lyft Inc., and Slack Technologies
Inc., The Wall Street Journal has reported.
When Tencent Music sold shares in the IPO Tuesday, investors
valued the company at $21.3 billion, making it one of the largest
traditional IPOs by market value in the U.S. since Alibaba Group
Holding Ltd. went public in 2014 at $169.4 billion. Tencent Music
generated about $533 million in proceeds from the IPO. Including
proceeds reaped by selling shareholders, the IPO hauled in about
$1.1 billion.
Tencent Holdings created Tencent Music by combining China Music
Corp. with Tencent Holdings' own streaming business in 2016.
Tencent Music operates several popular apps including QQ Music and
an online karaoke platform.
Since Tencent Music made its IPO plans public in early October,
stocks around the world have careened. At the heart of the
volatility are worries about trade-related tensions between the
U.S. and China and slowing economic growth in China.
Tencent Music executives in an interview said that while the
macro environment hasn't been ideal, the music-streaming industry
is better-positioned than many to weather an economic downturn and
a souring of U.S.-China trade relations.
Mr. Yip and the company's chief executive officer, Cussion Pang,
said they considered it a win to complete the IPO in 2018, which
they noted allows them to focus on the business, rather than
preparations for a public offering, next year.
--Allison Prang and Corrie Driebusch contributed to this
article.
Write to Maureen Farrell at maureen.farrell@wsj.com
(END) Dow Jones Newswires
December 13, 2018 02:47 ET (07:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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