Chinese music streaming platform, Tencent Music Entertainment, announces US IPO
Spotify‘s strategic partner in China, Tencent Music, has announced it will sell shares publicly on the New York Stock Exchange. The US IPO announcement was confirmed after a regulatory filing on the Hong Kong Stock Exchange. Tencent’s music division is said to be valued around $30 billion, making it as valuable as Spotify which went public in New York in April, 2018. Each company owns stock in one another after a trade swap in December of 2017. Spotify owns 9% of Tencent Music, and Tencent owns 7.5% of Spotify.
Tencent is still keeping numbers close to the vest, telling Variety,
“the terms of the proposed spin-off, including offering size, price range and assured entitlement of Tencent Music securities for shareholders of the company, have not yet been finalized.”
The Chinese multinational investment holding conglomerate, Tencent, is valued at $480 billion on the Hong Kong Stock Exchange, owning a variety of internet businesses, including WeChat, which has over 1 billion users. Tencent Music dominates the Chinese streaming market through QQ Music, KuGou and Kuwo platforms, with about 600 million users. 15 million of those users are paid subscribers.
The IPO will give Tencent Music new funds that it could use to purchase more content for its platforms. The Chinese streaming service has exclusive deals with all major labels, so they can decide which songs rivals can stream. Magnetic Magazine reported that the IPO would bring Western scrutiny to the massive Chinese tech company because the Chinese government has been known to be heavily regulatory on some media in the past. However, with a powerful tech space emerging in China, the Chinese government has proved slow or unwilling to impede progress.
H/T: CNN Money
Photo Credit: Wall Street Journal