Shares in esports streaming platform DouYu, which is backed by social media and gaming giant Tencent Holdings, started trading on the Nasdaq market today as part of the biggest IPO by a Chinese company in the USA this year.
DouYu sold $775m (€691m) in stock, valuing the company at $3.73bn. Shares were priced at US$11.5, the lower end of the company’s indicative range which ran to $14.
Some observers believe the weak pricing opens questions about DouYu’s decision to put its IPO on hold in May amid a global markets sell-off in reaction to US-China trade tensions.
DouYu, like market leader and Amazon subsidiary Twitch, specialises in video game live broadcasts. It has exclusive streaming rights to 29 major tournaments in China, including League of Legends, PlayerUnknown’s Battlegrounds and DOTA2.
Founded in 2014 in Wuhan in central China’s Hubei province, DouYu is one of several start-ups in the Chinese live-streaming market, along with Huajiao and Huya Inc., which is listed on the NYSE. Huya is also backed by Tencent.
DouYu made losses of $127.43m in 2018 according to its prospectus, but revenue was up 94 per cent year-on-year thanks to its six million paying users. For the first quarter of 2019, the company reported a net profit of $2.6m.
The firm has attracted nearly 160 million monthly active users across its platforms, up 26 per cent year-on-year.
Morgan Stanley, JPMorgan, Bank Of America Merrill Lynch and CMB International are the underwriting banks on the IPO.