Kuaishou’s bankers close order book two days early as investors scramble for US$5.4 billion IPO by Tencent-backed video-app operator
- Kuaishou’s Hong Kong public offering attracts pledges from investors worth more than 200 times, surpassing the initial reception to Ant IPO
- Driven by the fear of missing out, investors’ optimism on the loss-making short video platform outweighs concerns on its profitability
The retail portion, equivalent to 9.1 million shares or a tiny 2.5 per cent of the global offering, was overbought by 210 times on Tuesday, the first day of a weeklong subscription period ending Friday. The ratio is based on a calculation by South China Morning Post using the HK$226 billion (US$29.2 billion) of margin loans extended by various brokers in the city to buy the shares.
Inquiries and early bookings for Kuaishou’s shares had been helped by the record close of the Nasdaq Composite Index this week, which “has been helpful to the valuation of technology stocks,” said Philip Capital’s director Louis Wong, adding that the HK$31.5 billion of margin loan applications received by his brokerage was 58 per cent over his budget.
The world’s largest IPO since Alibaba Group Holding’s US$13 billion November 2019 secondary listing, the scramble for Kuaishou is a manifestation of investors’ search for yields in an era of cheap money unleashed by global central banks to combat the coronavirus-led economic slump. Driven by the fear of missing out, investors are more concerned about getting allocations than asking how Kuaishou can turn its 262.4 million daily active users into profits.
Kuaishou, based in Beijing, was unprofitable in each of its three previous financial years, reporting a nine-month loss of 97.4 billion yuan (US$15 billion) despite a 59 per cent jump in daily active users in the same period.
