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Pinduoduo Prices Follow-on Shares at $25, Disappointing Investors

Shares in Pinduoduo were trading at $25.95 apiece, 2 percent down, intraday Friday.

Anna Vodopyanova
    Feb 08, 2019 10:47 AM  PT
Pinduoduo Prices Follow-on Shares at $25, Disappointing Investors

The stock of Pinduoduo Inc. (Nasdaq: PDD) was trading down more than 2 percent Friday afternoon, at $25.95 per American depositary share, after the company priced its follow-on public offering at $25 per ADS.

The Shanghai-based discount shopping platform filed to sell 40.2 million ADSs, as well as 14.8 million shares held by several shareholders. The follow-on offering was 3 million ADSs larger than Pinduoduo's initial target announced earlier this week. Each ADS represents four class A ordinary shares of the company. 

The pricing of the offering represents a decrease of 6 percent from yesterday's close and is 14 percent lower than Pinduoduo's shares at the beginning of this week when they traded at $29.05 apiece.

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Shares in Pinduoduo were trading at $25.95 apiece, 2 percent down, intraday Friday.

That was a decline of 11 percent from its price at the beginning of the week.

(Source: Thomson Reuters Eikon)

Proceeds from the offering would be used to enhance and expand Pinduoduo's business operations, and research and development. It would also be used for general corporate purposes and working capital, including potential strategic investments and acquisitions, the company said. 

Joint underwriters on the deal are Goldman Sachs (Asia) LLC, BofA Merrill Lynch, Morgan Stanley, CICC, and China Renaissance. Upon the completion of the offering, they may purchase an additional 8.25 million ADSs within 30 days. 

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