Kingsoft Cloud, founded in 2012, is a platform for businesses and developers, providing online cloud storage and cloud distribution services. The Beijing-based cloud computing service company sold 30 million American depositary shares at $17 each in a stock exchange filing on Friday and raised 510 million, according to a filing with the U.S. Securities and Exchange Commission. It is important to say that Kingsoft is the first Chinese company to list in the U.S. since the coronavirus pandemic hit the stock market.
A rise in the first big U.S. IPO
JPMorgan Chase & Co., UBS Group AG, Credit Suisse Group AG, and China International Capital Corp. led the offering. Shares in Kingsoft Cloud have started trading Friday on the Nasdaq stock exchange, under the ticker KC. This IPO is giving the company a market value of $4.77 billion. According to Nasdaq, parent company Kingsoft and existing shareholder Xiaomi intend to purchase $25 million and $50 million worth of ADSs in the offering.
Henry He, Kingsoft Cloud’s chief financial officer, said,
“Given the context regarding China ADR, it’s actually good for quality companies. The capital has to be deployed and quality long-only investors will pay more attention to quality companies like us.”
Kingsoft is the third biggest cloud-computing services provider in China after China and Alibaba Group. Moreover, Bloomberg’s data shows that Kingsoft Cloud’s U.S. share sale is the biggest by a Chinese company this year. Last year, the company lost $160 million on revenue of $568 million.
The scandal of Luckin Coffee, a Chinese company, augmented skepticism for Chinese firms. Luckin was accused of accounting fraud. Its shares had fallen 74% from its IPO price last year. The series of high profile tech startups such as Uber and WeWork had no clear path to profitability. The major trading of Kingsoft may decrease skepticism for Chinese firms.Stay tuned for up-to-date Cloud Computing News