TenCent Music IPO set to open tomorrow - looks like pre-cursor for LYFT and UBER

Looks like tough time for IPO


Tencent Music Entertainment Group priced its IPO at the low end of expectations, capping a rocky process of going public but still marking one of the biggest U.S.-listed debuts in recent years.

The Chinese music-streaming company’s initial public offering priced at $13 per American depositary share Tuesday afternoon, the bottom end of its $13-to-$15 expected range. The offering raised roughly $1.1 billion for the company and its selling shareholders.

At $13 an ADS, Tencent Music is valued at $21.3 billion on a fully diluted basis, according to Dealogic—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 a whopping $169.4 billion.

Tencent Music will start trading on the New York Stock Exchange on Wednesday under the symbol TME. It is part of internet giant Tencent Holdings Ltd. TCEHY 2.25% and operates several popular apps including QQ Music and an online karaoke platform.

It was created in mid-2016 after Tencent Holdings bought a controlling stake in China Music Corp. and combined it with Tencent’s existing streaming business. The company recently boasted more than 800 million total unique monthly active users.

Its road to public markets has been a turbulent one, and the valuation is lower than the $25 billion to $30 billion the company and its underwriters were seeking earlier this fall, according to people familiar with the company’s plans.

Since it publicly filed with the Securities and Exchange Commission in early October, stocks around the world 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. Since the beginning of October, the S&P 500 has fallen roughly 10%.

Shares of Spotify Technology SA, Tencent Music’s closest public peer in the music-streaming space, have tumbled nearly 30% in that period.

After it filed, Tencent Music postponed its offering for two months, hoping to wait out the volatility.