Tencent’s IPO of its music business failed to raise as much money as the internet giant had hoped. But shares still enjoyed a solid debut once they began trading.
Tencent Music, which dominates music streaming in China, said Wednesday that its listing priced at the bottom of its targeted range. By selling shares at $13 each, the company is raising nearly $1.1 billion, roughly half the amount it was reportedly seeking to raise earlier this year.
The shares started trading late Wednesday morning on the New York Stock Exchange with the ticker TME. The stock rose nearly 13% in their debut, to about $14.70 a share.
Tencent Music is going public at a volatile time for tech stocks, which have been rattled by the unpredictable trade war between the United States and China. The Chinese company’s IPO was reportedly delayed in October as markets went haywire. It announced it was moving forward with the IPO after Beijing and Washington agreed to a 90-day trade truce earlier this month.
Tencent Music’s IPO price will give it a market value of $21.3 billion, according to data provider Dealogic. It will remain a subsidiary of parent company Tencent (TCEHY).
Global music streaming service Spotify (SPOT), which listed in New York in April, is now trading below its IPO price, giving it a market value of about $23.3 billion. Spotify’s stock got a lift Wednesday though, rising about 3%.
Tencent Music rules the music streaming market in China with a suite of apps through which users can listen to music, connect with other people to sing karaoke, or watch pop stars perform live.
Tencent Music and Spotify already have ties. The two music streaming giants own minority stakes in each other.
Unlike Spotify, Tencent Music is coming to market profitable.
The Chinese company reported a net profit of 3 billion yuan ($436 million) for the first nine months of this year.
When it went public in New York in April, Spotify reported a net loss of €378 million ($428 million) for 2017. Last quarter, it reported a loss of €6 million ($6.8 million).
Tencent Music is the third largest Chinese IPO in the United States this year, according to Dealogic. Streaming video platform iQiyi (IQ) raised $2.3 billion in March and social shopping app Pinduoduo (PDD) raised $1.6 billion July.
