Tencent-backed Qutoutiao more than doubles in US trading debut

Pedestrians walk along an elevated walkway in the Lujiazui Financial District in Shanghai, China, on Monday, Sept. 4, 2017. Photographer: Bloomberg/Bloomberg

Qutoutiao Inc., the Chinese news and video aggregation app backed by Tencent Holdings Ltd., more than doubled in its U.S. trading debut after pricing its shares below range in a downsized IPO.

Qutoutiao closed up 128 percent at $15.97 after almost tripling earlier Friday, giving it the biggest first-day increase of a significant U.S.-listed IPO this year. The stock’s volatile early trading triggered four halts when the price surged in the first half hour after it opened. About 17 million shares changed hands Friday, according to data compiled by Bloomberg.

The Shanghai-based company sold 12 million American depositary shares for $7 apiece to raise $84 million. The shares, reduced from the 16 million that company had planned to sell earlier, were marketed at $7 to $9 each.

The company’s first-day rise topped that of Zscaler Inc., which rose 106 percent in its March 16 trading debut, according to data compiled by Bloomberg, excluding a $3.2 million offering.

Qutoutiao said it plans to use the IPO proceeds to expand and enhance its content and improve its products, as well as for marketing and general corporate purposes including potential acquisitions.

Qutoutiao is the second Chinese company to list in the U.S. this week and see attention-grabbing trading. Electric-vehicle maker NIO Inc. closed up 76 percent on its second day of trading Thursday, following a 5 percent rise on its first day after a $1 billion IPO. NIO’s shares, which rose as much as 19 percent Friday, closed down 15 percent to $9.90

Qutoutiao is the 25th Asia-based company to list on New York exchanges this year to raise a combined $7.4 billion in IPOs, according to data compiled by Bloomberg. That compares with two-dozen listings in all of 2017 that raised $4.9 billion in new share sales.

56 Minutes Daily

The company, whose name means “fun headlines,” has about 17.1 million daily active users who spend about 56 minutes on the app daily, according to filings with the U.S. Securities and Exchange Commission. Monthly active users total about 48.8 million. The company has sought to work closely with stakeholder Tencent in various areas.

Qutoutiao’s net revenue for the first half of 2018 jumped to $108.5 million, from $16.2 million from the same period a year earlier. As it focused on growing its user base and improving services, the company’s net losses mounted, rising to $77.7 million for the first six months of 2018 from $4.3 million a year earlier, according to a filing.

The offering was led by Citigroup Inc. and Deutsche Bank AG. Qutoutiao is trading on the Nasdaq Global Market under the symbol QTT.

Bloomberg

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.