Chinese Esports Group DouYu Raises $775 Million in U.S. IPO -- Update
July 17 2019 - 4:49AM
Dow Jones News
By Joanne Chiu and P.R. Venkat
A Chinese video-streaming service raised $775 million through a
Nasdaq listing, capitalizing on the growing popularity of watching
others play games on the internet.
The initial public offering by DouYu International Holdings Ltd.
was the biggest this year by a Chinese company in the U.S., ahead
of the $645 million IPO of cafe chain Luckin Coffee Inc. DouYu
offers both desktop and mobile apps, and counts China's Huya Inc.
and Amazon.com Inc.'s Twitch among its peers.
DouYu, which is backed by Chinese internet heavyweight Tencent
Holdings Ltd., sold 67.39 million American depositary shares at
$11.50 apiece, at the bottom of an indicative price range of $11.50
to $14.00 a share, it said in a statement. Its shares will start
trading on Wednesday.
The IPO values the company at nearly $4 billion, including
restricted shares issued to employees under a share-based
compensation program.
China's esports industry is the world's largest by revenue and
number of gamers, according to iResearch. Last year some 683
million people, or roughly half the country's population, played
games on phones, computers or game consoles. The market-research
firm forecasts that number will reach 878 million--or nearly a
third of videogamers globally--in 2023.
Rival Huya's shares have more than doubled since it listed on
the New York Stock Exchange in May 2018.
After three consecutive years of net losses, DouYu swung to a
net profit of $2.7 million for the three months ended March. The
number of average monthly active users accessing its live-streaming
platforms via personal computers and smartphones stood at 159
million in the first quarter, up more than 25% from a year
earlier.
About two-thirds of the money raised came from selling new
shares, and the company plans to invest the proceeds in content,
marketing and research and development. The rest of the stock came
from existing shareholders selling down their holdings, including
Zhang Wenming, the company's co-chief executive and co-founder.
Tencent will remain the single largest shareholder after the
IPO, with a 37.2% stake, DouYu's prospectus shows. This figure is
before any potential dilution caused by employee stock plans.
Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, BofA
Merrill Lynch and CMB International Capital Ltd. were joint
bookrunners.
Write to Joanne Chiu at joanne.chiu@wsj.com and P.R. Venkat at
venkat.pr@wsj.com
(END) Dow Jones Newswires
July 17, 2019 04:34 ET (08:34 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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