Kingsoft, a Chinese internet and software company, is focusing on Nasdaq IPO and speculates the IPO to raise funds between USD 392 million and USD 451 million.
Despite unreliability in the market, the Chinese tech giant looks forward to spinning off its cloud division and listing it on Nasdaq. It is essential to know that this IPO is set to debut amidst the COVID-19 pandemic that has witnessed a bear market and not to forget the recent Chinese Luckin Coffee fraud.
More by Kingsoft
Kingsoft Cloud plans to issue 2,000,000 American Depository Shares (ADS), and it might add about 3,750,000 more if the over-allotment option gets the green signal. This option permits underwriting banks with the ability to sell additional shares compared to the original amount.
Additionally, the company has plans to test the US investors’ demands to understand if China’s new listings could withstand the recent account of scandals.
More about the IPO
Kingsoft expresses that each ADS is expected to be priced anywhere between USD 16 and USD 18 and will help raise approximately USD 3.4–3.8 billion, considering that the over-allotment option is not exercised.
The company priced the IPO on Thursday (May 7, 2020) and has opened trading on Friday (May 8, 2020) on Nasdaq.
The cloud division of Kingsoft offers products ranging from storage to networking and computing. Its revenue graph rose 78.4% year-on-year to reach an impressive CNY 3.9 billion, which is approximately USD 568.3 million, in 2019.
As the IPO comes during a tough stock market situation, which has hampered the global economy, it will test the investor interest and enthusiasm for new listings. In addition to this, the scrutiny on Chinese listings in the US post the Luckin Coffee fraud adds to the IPO checklist.