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Bilibili Lands $317 Million Funding From Tencent; Stock Soars 6% Intraday

Bilibili saw its shares skyrocket as much as 16 percent in early trading today, before retreating slightly to $14.10 per ADS after the announcement of its deal with Tencent.

Anna Vodopyanova
    Oct 03, 2018 10:40 AM  PT
Bilibili Lands $317 Million Funding From Tencent; Stock Soars 6% Intraday

Chinese entertainment platform Bilibili Inc. (Nasdaq: BILI) is to receive a $317.6 million investment from Tencent Holdings Ltd. (HKEX: 0700), the companies announced today, sending the U.S.-listed stock up nearly 6 percent intraday.

Tencent, China's tech giant, would acquire 25.1 million of newly issued ordinary shares of Bilibili at $12.67 each, representing a 5 percent discount from Tuesday's close.

Despite the lower price, Bilibili saw its shares skyrocket as much as 16 percent in early trading today, before retreating slightly to $14.10 per share, up 79 cents, by the afternoon.

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Shares in Bilibili spiked as high as 16 percent in early trading, then retreated to $14.10 per share by noon, up nearly 6 percent.

(Source: Thomson Reuters Eikon)

With this deal, the conglomerate is extending its reach deeper into China's entertainment market. Tencent is an existing, pre-IPO investor in Bilibili, having funded $4.6 million in the company in May 2017 through its app developer arm, Tencent Mobility Ltd. The companies are also tied through Yao Liu, a former senior executive at Tencent, who has celebrated a year as Bilibili's vice president in September.

As of March, prior to Bilibili's IPO, Tencent entities held 1.2 percent of voting power and 4.4 percent of beneficial ownership in the company. The deal announced today would allow Tencent to beneficially own 12.3 percent of Bilibili's shares.

Shanghai-based Bilibili generates revenue from live broadcasting, advertising, and mobile games, with the lattermost bringing the majority share. The platform boasted 85 million average monthly active users during the second quarter, with 3 million paying users. More than 80 percent of its users are anime, comic, and gaming (ACG) fans between 17 and 24 years old. The company has not yet turned to profit.

At the end of March, Bilibili raised $483 million in its debut on the Nasdaq.

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