Market cheers Tencent’s US$300 million investment in Chinese video streamer Bilibili

Bilibili Inc. is earning its moniker as one of the more promising technology stocks to go public out of China this year, and hedge funds are cheering Wednesday’s rally.

The Shanghai-based video streaming service’s ADRs rose the most in more than a month to a fourth-month high above $15 per share after Tencent Holdings Ltd. announced plans to invest more than US$300 million in the company. Shares of Bilibili sit above two of their key moving averages as they climbed as much as 16 per cent intraday.

Tencent, a technology giant also based in China, will now join the ranks of other major shareholders: Tiger Global Management, Wells Fargo & Co., JPMorgan Chase & Co., BlackRock Inc., and Alkeon Capital Management. Tiger Global, a New York-based hedge fund, led the list as the largest stakeholder with a three per cent stake representing 5.8 million shares. Tencent will beneficially own about 12.3 per cent of total issued shares after the completion of the transaction.

After holding an initial public offering in New York in March, Bilibili rose more than 70 per cent before paring some of those gains in late June. Tariff tensions between the US and China, in addition to pressure on the broader markets, weighed upon cross-border IPO listings. Despite those headwinds, Bilibili remains up 29 per cent from its IPO price. Its lock-up expired at the end of September.