Kingsoft Cloud is considering a Nasdaq IPO, in a US$450 million bet that anti-China sentiment is a tempest in a teapot
- Kingsoft Cloud will test if US investors’ demand for Chinese new issuers could withstand recent account scandals, such as those of Luckin Coffee
- Anchor investor, online roadshow help push Kingsoft Cloud’s IPO ahead as first disclosed by parent last December
The Beijing-based unit of Kingsoft Corporation plans to sell up to 25 million American depositary shares at between US$16 and US$18 each, raising up to US$450 million, after conducting its investor roadshow last month, said a source close to the company.
There will be an overallotment option, known as a greenshoe, to sell an additional 3.75 million ADS in a deal underwritten by JPMorgan, UBS, Credit Suisse and China International Capital Corporation (CICC), according to a preliminary prospectus filed to the Securities and Exchange Commission earlier Monday. The final offer price is expected on May 7.
“There will always be a pipeline of Chinese companies which would prefer a listing in the US over Hong Kong and China, as the US presents a better option for [smaller] issuers due to their better liquidity for smaller-cap companies,” said Jeffrey Sun, a partner at the law firm Orrick in Shanghai.
Kingsoft Cloud’s timing coincides with a looming tempest in US-China relations, which has deteriorated to a multi-year low as officials of both sides exchange blame for being the origin of the global coronavirus pandemic, which has afflicted 3.5 million people around the world – with one in three confirmed cases in the US – and claimed 251,000 lives.