Tencent Music Delays IPO Amid Market Turmoil: Report
As Wall Street eyes a Friday comeback following days of major losses, especially in the tech sector, one global giant is reportedly pumping the brakes on what would be one of the year's largest initial public offerings. The Wall Street Journal is reporting that Tencent Holdings' music streaming platform, Tencent Music Entertainment, has postponed its IPO until at least November following this month's global selloff.
The Journal reports that following a meeting with its underwriting team this week, TME decided to push back an investors roadshow planned for next week ahead of an Oct. 22 IPO. The company is reportedly expecting to raise roughly $2 billion, which would make this the second largest IPO by a Chinese company in the U.S. this year, behind video streaming company iQiyi at $2.4 billion.
But after the S&P 500 suffered some of its worst drops in months this week -- 3.29 percent on Wednesday and 2.06 percent on Thursday -- the company has apparently decided to hold off a bit. In Hong Kong, Tencent Holdings' shares fell nearly 7 percent on Thursday.
Tencent Music currently runs the four top mobile music apps in China by monthly active users, namely QQ Music, Kugou Music, Kuwo Music and WeSing. Combined, the four services have over 800 million monthly active users, according to the parent company’s F-1 filing announcing the IPO. Tencent Holdings has a 58 percent stake in TME, while Spotify took 9.1 percent following a stock swap late last year. The IPO filing also revealed that Warner Music and Sony Music purchased a total of 68,131,015 ordinary shares in TME, worth approximately $200 million.
Global stock indexes rose Friday on hopes that President Donald Trump and President Xi Jinping of China will meet next month to discuss a growing trade war between the world’s two largest economies.