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Tencent Music Entertainment Group postpones its IPO to at least November due to massive sales in global markets, according to people familiar with the offer, pausing in what would be one of the most important introductions in the United States this year.
The streaming music company met with its underwriting team this week to discuss the price range that Tencent Music would set for its much-anticipated IPO, but they chose to wait several weeks because the worries of markets would have an impact on prices.
The company was to launch its roadshow to sell shares to investors next week and is expected to start trading from the week of October 22, said one of the managers.
The valuation of a company in a position to become one of the largest technological IPOs in history is at risk. According to initial discussions with investors, the demand for registration should be strong, said one of the interviewees, and Tencent Music expected a valuation between 25 and 30 billion of dollars.
However, stock market valuations may be volatile and may change until the offer is evaluated. Tencent Music's private valuation has skyrocketed over the past year – the company was valued at $ 12.5 billion last year when it traded with its counterpart Spotify Technology SA.
From the invention of the phonograph in 1877 to the current boom of streaming services, the music industry had to continually adapt to emerging technologies. In this video, we explore whether music can continue to reinvent itself to survive. Photo: Liliana Llamas / WSJ
The decision to postpone comes as global markets were boiling. US stocks fell sharply Thursday, a day after Dow's industrials were dragged down by falling stocks of technology companies. The S & P 500 index has declined more than 6% so far this October.
Chinese markets, for their part, were among the hardest hit during the recent defeat. Its technology companies are particularly affected by the escalation of a trade dispute between the United States and China, which has hurt China's largest technology providers, as well as many massive sales of Internet companies .
The parent company of Tencent Music is one of the most successful companies.
Tencent Holdings
Ltd.
TCEHY -0.99%
, whose shares fell 6.8% Thursday in Hong Kong for their 10th consecutive decline. Its shares are down 34% so far this year.
Earlier this month, Tencent Music decided to go public in the United States, opening the way for China's largest source of streaming music, likely to become one of the world's largest technology IPOs. day.
This service was created in mid-2016 after Tencent Holdings acquired a majority stake in China Music Corp. and combined it with Tencent's streaming activity. Tencent Music operates several popular apps, including QQ Music and an online karaoke platform. It is enjoying a huge boom in streaming that has transformed the music industry.
The IPO market in the US is booming this year, with 193 companies raising $ 52.7 billion, the busiest year since 2014, and a 46% increase over the first quarter. last year, according to Dealogic data.
Write to Julie Steinberg at [email protected] and Maureen Farrell at [email protected]
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