Futu aims to raise US$1.9 billion in follow-on stock sale in New York as Tencent-backed broker taps investors’ penchant for punting on IPOs
- Online brokerage kicks off second follow-on share sale in eight months, targeting US$1.9 billion
- Shenzhen-based firm seeks fresh capital to brace for cutthroat IPO retail competition
Online brokerage platform Futu Holdings has launched a follow-on sale of new shares on Nasdaq to raise about US$1.9 billion, according to a person familiar with the transaction, as it seeks new funding to expand its margin financing business amid cutthroat competition.
The brokerage, whose name means “path to wealth” in Chinese, offers online trading service of Hong Kong, Chinese and US stocks. It is selling 9.5 million American depositary shares, with an overallotment option to offer another to 1.43 million shares to meet strong investors demand. The final offer price will be determined on Wednesday.
Bank of America and Haitong International are joint bookrunners of the deal. They were not immediately available for comment.
“The COVID-19 pandemic has further transformed the industry landscape and created new opportunities for online brokers amid lockdown and other restrictive measures,” Futu said in its filing to the US Securities and Exchange Commission (SEC) on Monday. “A growing number of investors have moved from offline channels to online platforms for trading activities.”