NetEase Inc (NASDAQ: NTES) has won consent from the Hong Kong stock exchange for an initial public offering. NetEase Inc has held up the $1 billion Hong Kong initial public offering for its music Cloud Village. A streaming service of Chinese gaming giant is the reason for volatile trading in all major tech companies in China, two people with immediate information on the matter said.
The statement has not yet been made public. A NetEase representative said the company had not given any immediate response.
NetEase delays Overall $1 billion Hong Kong listing of music streaming firm – sources.
The IPO has been approved by the Hong Kong Stock Exchange’s listing committee, according to filings lodged with the exchange, and final meetings were scheduled with all potential investors last week. The operator of NetEase cloud village initially planned to increase as much as US$1 billion posts, winning the Hong Kong stock exchange’s approval. Cloud Village’s settlement to approve the initial public offering (IPO) was finalized in July, as data from Refinitiv shows fundraising in the city would drive to 60 percent yearly, which is approx US$2.8 billion from 17 deals.
The deal was anticipated to launch this week but put on hold on Monday; the sources have stated the reason for unresolved conditions has pushed China’s tech companies to follow a regulatory crackdown ordered by Chinese officials. NetEase’s Hong Kong has revealed a share decline of nearly 14% last week and announced that China’s gaming sector could be next in line for increased regulatory inspection. The stock rose to 4.1% on Monday.
NetEase has declared in May that it would spin off Cloud Village and hold on 62.4% ownership of the streaming business. According to its May regulatory filings, NetEase planned to hold on not less than 50% because of its voting power in the company. As one of the sources informed, Cloud Village has been focusing on boosting up to $1 billion in the Hong Kong IPO. According to the firm’s listing documents Alibaba Group Holdings, Baidu Inc, General Atlantic, and Boyu Capital would be Cloud Village investors.