NetEase IPO: Chinese Gaming Company Seeks Nearly $ 3 Billion on Hong Kong List

NetEase IPO: Chinese Gaming Company Seeks Nearly $ 3 Billion on Hong Kong List

The Chinese gaming company said it was issuing more than 171 million new shares at a maximum price of Hong Kong $ 126 ($ 16.26) each, without offering any discount to NetEase’s closing price in New York, where its shares listed since 2000.

The transaction could raise around $ 2.8 billion for the company, assuming prices are at the top of the range. The final price is expected to be set on Friday. The company did not immediately respond to a request for comment on its minimum price for the new shares.

NetEase is expected to start trading in Hong Kong on June 11.

The company started as a Chinese Internet portal in the late 1990s and expanded to online gaming in 2001. It is the second largest mobile gaming company in the world, behind Tencent (TCEHY), according to the analysis company App Annie. NetEase says its most popular games are Identity V, Knives Out, and Rules of Survival, among others.

NetEase said it wants to use the money to expand its online gaming offerings in foreign markets such as Japan, the United States, Europe and Southeast Asia. It also intends to use some funds to fuel its continued search for innovation.

The cash surge comes as tensions between the United States and China mount, threatening to break what was already a fragile trade truce between the world’s largest economies. The two countries have hit by a new Hong Kong national security lawHe pointed his fingers at who is to blame for the coronavirus pandemic and have a heater, ongoing fight over who controls the technologies of the future.

NetEase will raise billions in Hong Kong just as Chinese companies looking for IPOs on Wall Street face increased scrutiny.

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the Nasdaq (NDAQ) last month he proposed rules that would make it harder for Chinese companies to go public in that exchange.
AND following the Luckin Coffee accounting scandal, the United States Senate unanimously approved a bill last month that would prevent companies that refuse to open their books from listing on Wall Street. The bipartisan cosponsors of the bill said the goal is “to expel deceptive Chinese companies from US exchanges.” The bill has yet to pass in the United States House of Representatives before proceeding.

In documents filed with the Hong Kong Stock Exchange, NetEase cited the US regulatory environment. USA

“The enactment of any of those laws … could cause investor uncertainty for affected issuers, including us, the market price of our [US shares] it could be adversely affected, and we could be removed from the list if we cannot “qualify,” NetEase said.

The nasdaq moved to Luckin’s list after the Chinese coffee chain admitted that a significant portion of its revenue last year was offset. Luckin appealed the decision and his actions resumed operations. Its stock has fallen 95% in the year.
Despite intensified scrutiny, U.S. markets remain attractive to Some Chinese companies. Dada Nexus, based in Shanghai, an on-demand grocery delivery company backed by Walmart (WMT) and Chinese e-commerce company JD.com (JD)He said Monday that he hopes to raise more than $ 280 million in a US public offering.

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Cory Weinberg

About the Author: Cory Weinberg

Cory Weinberg covers the intersection of tech and cities. That means digging into how startups and big tech companies are trying to reshape real estate, transportation, urban planning, and travel. Previously, he reported on Bay Area housing and commercial real estate for the San Francisco Business Times. He received a "best young journalist" award from the National Association of Real Estate Editors.

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