With all eyes on the IPOs of Palantir Technologies and Asana, Chindata Group Holdings is leading a trio of small technology startups that are making their market debuts.
Both Palantir, the data-analytics company backed by Peter Thiel, and Asana, a cloud software provider, are direct listings. These deals differ from traditional initial public offerings in that the investment bankers act more as financial advisors, rather than underwriters. Companies in a direct listing don’t create new shares or sell them to the public; they just begin trading.
Asana (ticker: ASAN) opened at $27 Wednesday, above its $21 reference price. Palantir set a reference price of $7.25 Tuesday., but hadn’t begin trading by early afternoon. Designated market makers typically use the reference price to help set the opening trade in a direct listing, according to the New York Stock Exchange said. Both Palantir and Asana are launching their IPOs on the NYSE.
Direct listings are a way for shareholders to “freely sell their shares which would otherwise be restricted in a regular IPO,” said Kathleen Smith, a principal with Renaissance Capital.
The offerings from Chindata (CD),
(BQ) are traditional IPOs. In these situations, new shares are created, and the stock is underwritten by investment banks and sold to the public. Companies typically use IPOs to raise money for growth opportunities. Shareholders in a traditional IPO are typically barred from selling until after a certain period.
Chindata opened Wednesday at $14.50 and rose 14.5% to a high of $15.47. The stock changed hands at $15.41, for a gain of 14%, in early afternoon.
The Chinese data-center operator raised $540 million after selling 40 million American Depositary Shares at $13.50, the top of the range of $11.50 to $13.50 investors had been told to expect.
and Citigroup Global are underwriters on the deal.
The Beijing company provides data-center technology for the Asia-Pacific emerging markets, focusing on China, India, and Southeast Asia. ByteDance, which owns TikTok, accounted for nearly 82% of Chindata’s revenue as of June 30, a prospectus said.
Chindata is not profitable. It reported $8.4 million in losses for the six months ended June 30, with $114.7 million in revenues, according to a Sept. 23 filing with the Securities and Exchange Commission. This compares to 94.9 million Chinese yuan ($14 million) in losses and 221.5 million yuan in revenue for the same period in 2019.
Bain Capital invested in Chindata in 2019, reportedly putting in $570 million. The private-equity firm will have 81.2% of aggregate voting power after the IPO. Jing Ju, Chindata’s founder, director and CEO, will have 13.5%.
Separately, shares of Yalla opened at $9.75 and hit a high of $10.99. In afternoon trading, the stock changed hands at $7.43, down from its $7.50 IPO price.
Yalla collected $139.5 million after selling 18.6 million ADS’s at $7.50 each, near the low end of its $7 to $9 price range. Morgan Stanley,
Haitong International Securities,
and Tiger Brokers are underwriters on the deal. ‘
Yalla, of Dubai, is a voice-chat app for the Middle East and North Africa. Yalla is the largest voice-centric social-networking and entertainment platform in the region based on revenue, a Sept. 23 SEC filing said. About 12.5 million users visited the Yalla platform each month during the second quarter. The company’s operations are split between China and the United Arab Emirates
Founded in 2016, Yalla is profitable. The company reported $25.2 million of income and $52.8 million of revenue for the six months ended June 30. This compares to $11.4 million in income and $26.4 million of revenue for that period in 2019.
Tao Yang, Yalla’s chairman and CEO, will have voting power of 86.5% after the IPO.
Lastly, the stock of Boqii opened at $10 and hit a high $10.40. Shares fell to $6.70, down 33% from the $10 IPO price.
Boqii sold 7 million ADSs at $10 each, the low end of its $10 to $12 price range, for $70 million. Roth Capital Partners, CMB International Capital and Valuable Capital are underwriters on the deal.
Launched in 2008, Boqii is a pet-focused online retailer in China. The Shanghai company also operates a pet-focused online community, with 23 million registered users, a prospectus said.
Boqii is not profitable. The company reported roughly $6 million in losses for the three months ended June 30 on $33.7 million in revenue, the filing said. This compares to losses of 47.9 million yuan ($7 million) and revenue of 188.9 million for the same period in 2019.
Write to Luisa Beltran at [email protected]