Tencent Music Entertainment Group has delayed its planned float on the US stock market after this week’s market turbulence. The news of the delayed IOS first broke on the Wall Street Journal. There have also been big losses on the Chinese stock market this week. TME was expected to be kickstarting its roadshow next week and float the following week.
Tencent this week met with its underwriting teams at Goldman Sachs and Morgan Stanley to discuss the situation urgently and its understood that the IPO will be delayed until at least November.
The pricing range expected for TME is apparently between $29bn to $31bn, which has largely been gauged by Spotify’s float price, however unlike Spotify Tencent is profitable.
The Dow Jones Industrial Average and the S&P 500 suffered two-day losses of more than 5% as of Thursday’s close and on Wednesday the tech-focused Nasdaq logged over a 4% loss, its biggest decline of 2018.
“Tencent, which is a major player in that marketplace, has 700m+ people using their music service[s] every month, with 25m paying subscribers. Kevin Kelleher, Sony Music
Last year Tencent bought over 9% of Spotify’s shares of which around 25% are owned directly by their music division TME
Have Tencent (TME) missed their moment? That’s yet to be seen but as markets were at all times highs just 4 days ago and interest rates beginning to climb it’s quite possible. Only time will tell.