Qutoutiao Inc., the Chinese news and video aggregation app backed by Tencent Holdings Ltd., more than doubled in its U.S. debut, with the stock’s volatility triggering multiple trading halts.
Qutoutiao climbed as much as 128 percent to $15.99 in the first half-hour of trading after pricing its downsized initial public offering at the low-end of the marketed range. The surge caused trading to be halted at least four times in that period.
The Shanghai-based company sold 12 million American depositary shares for $7 apiece to raise $84 million, according to a statement on Friday. The shares, reduced from 16 million that company had planned to sell earlier, were marketed at $7 to $9 each. They were up 105 percent to $14.33 at 1:07 p.m.
The company 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 China 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, fell 6.3 percent to $10.87 at 1:07 p.m.
Qutoutiao joined 24 Asia-based companies that have already listed on New York exchanges this year to raise a combined $7.3 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.