M17 Entertainment Ltd (M17娛樂集團), which operates dating app platform 17 Media, yesterday said it has suspended its US$60 million initial public offering (IPO) plan on the New York Stock Exchange (NYSE), ending days of speculation about a flop.
The company made the announcement after it failed to secure any transactions since it rang the bell on Wall Street on Wednesday last week, prompting speculation that overpricing might stifle its debut.
The live-streaming company was given a rough ride for its debut in the US as it was forced to scale down the IPO by lowering offering price to US$8 per American depositary share (ADS).
The company’s original plan sought to trade its ADS from US$10 to US$12 each, which would have boosted its valuation to US$118 million.
“The company has temporarily halted the plan to debut on the NYSE,” M17 Entertainment said in a company statement released yesterday, citing unspecific transaction problems.
“The company believes it will be better to keep the company private to seek the best interests of its shareholders, employees and third-party [investors],” it said.
M17 Entertainment, founded in 2015 by singer Jeffrey Huang (黃立成), had planned to offer 7.51 million American depositary shares. Each ADS represents eight class-A ordinary shares.
Despite the IPO’s failure, the company has obtained a new round of capital injection totaling US$350 million through a private placement, the statement said.
The company plans to use the new fund to support its operational growth and expand its footprint in Japan and other regional markets, it said.
The fresh funding comes from existing investors, including Infinity Venture Partners, Majuven Pte, Convergence and Global Grand Capital.
M17 Entertainment operates the largest live-streaming platform by revenue in developed Asia, with a market share of 19.2 percent, or 33.3 million users, in the first quarter of this year, the company said, citing Frost & Sullivan data.
As a social media start-up, it is no surprise that the company has not turned a profit yet.
The company lost US$26.95 million in the first quarter of this year, on revenue of US$37.9 million, its prospectus showed.
The company has accumulated 7,719 contracted artists as of March 31, it said.
Last year, M17 Entertainment lost US$22 million on US$79.5 million revenue, the prospectus said.
Live-streaming services accounted for the majority, or 90 percent, of the company’s total revenue, the company said.
Citigroup Inc and Deutsche Bank Securities Inc jointly managed the IPO, while Daiwa Capital Markets Inc and Mizuho Securities were co-managers.
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