Tencent Music prices US IPO at lower end of expectations amid tech and trade war uncertainties

Tencent Music Entertainment Group, the music industry spin-off of China’s biggest social network operator Tencent Holdings, priced its shares at the lower end of expectations for its initial public offering in New York amid ongoing global market volatility.

Tencent Music, one of the most anticipated IPOs of the year, priced its stock at US$13 per American Depositary Receipt (ADR), at the bottom of a US$13 to US$15 range, according to a filing by Tencent to the Hong Kong stock exchange on Wednesday.

It is set to raise around US$1.1 billion through the debut on the New York Stock Exchange, smaller than earlier reports of US$2 billion before IPO proceedings were paused in October amid a global tech sell-off, according to various news reports citing sources familiar with the matter. The pricing values China’s biggest music streaming service at US$21.3 billion.

A global tech sell-off amid slowing growth and a US-China trade spat has hurt US and the Chinese companies alike. Facebook, the social media giant, has lost almost 40 per cent of its market value in the past five months. Chinese smartphone maker Xiaomi, touted as one of this year’s hottest Hong Kong IPOs, has had a bumpy ride and fell below its initial price while Chinese food delivery giant Meituan, which went public in September, is currently a quarter lower than its debut price.

Shares of Spotify, a Swedish company with a similar music streaming service to Tencent Music, has seen its shares slashed by nearly 30 per cent since October.