36Kr Raises $20 Million in New York IPO; Stock Tumbles on Debut

36Kr's stock was trading down 11% by mid-afternoon Friday amid ongoing trade tensions and overall market uncertainty.

Anthony Russo
    Nov 08, 2019 11:00 AM  PT
36Kr Raises $20 Million in New York IPO; Stock Tumbles on Debut
author: Anthony Russo   

Tech and business content platform 36Kr Holdings Inc. (Nasdaq: KRKR) rang the bell on the Nasdaq on Friday, marking its debut as a publicly traded company.

Right away, the stock in 36Kr slid below the offering price of $14.50 per American depositary share, already at the low end of its expected range. By mid-afternoon, its stock was at $12.90, down 11%. 

Overall, the Beijing-based company raised $20.3 million in the initial public offering of its 1.4 million ADSs. According to earlier filings, 36Kr targeted to offer double the number of the ADSs eventually sold and raise up to $63 million.

Underwriters on the deal may purchase up to an additional 207,000 in ADSs, according to 36Kr's Thursday filing with the U.S. Securities and Exchange Commission. Securing 36Kr's IPO are Credit Suisse Securities (USA) LLC, China International Capital Corporation Hong Kong Securities Ltd., AMTD Global Markets Ltd., Needham & Company LLC and Tiger Brokers (NZ) Ltd. 

Despite the overall uncertainty in the markets, Lukman Otunuga, a research analyst for ForexTime, noted some positive developments.

"The timing for Chinese-based companies to be listed on Wall Street could be ripe given how renewed trade optimism has boosted global risk sentiment," Otunuga told CapitalWatch in a written statement on Friday.

"Wall Street has performed well in recent weeks thanks to robust corporate earnings, improving market mood and monetary policy easing across the globe," he added.

Meanwhile, Sino-U.S. trade tensions are ongoing. U.S. President Donald Trump today has not agreed to roll back tariffs on China.

Otunuga also said the final months of this year will be a rollercoaster ride for capital markets.

"Until the United States and China roll back existing tariffs, equity markets and riskier assets are likely to face obstacles down the road," he stated.

36Kr said it will use 60% of the proceeds of the IPO to enhance its content offerings, expand its business service scope and increase its client base and service depth. The remaining 40% will go towards improving data analytics and technological capabilities, supplementing its workforce and other general corporate purposes.

Founded in 2010, 36Kr has developed a suite of business services for new economy participants in China. 36Kr provides tailored online advertising and subscription services, as well as other enterprise value-added services. The company's database covers over 800,000 enterprises. Over 100,000 articles were published on its platform and helped around 30,000 companies gain exposure to hundreds of millions of people across the world, according to its official website.

36Kr Image 1.png

(Source: 36Kr F-1/A)

Gross Domestic Product (GDP) for China's new economy sector is expected to reach $5.7 trillion in 2023, at a compound annual growth rate (CAGR) of 23%, 36Kr said in its filing, citing a report from the CIC.

36Kr reported in three months through September its revenue was 126 million yuan ($18 million), up 54% year-over-year, according to the filing. Its expenses doubled to 70 million ($10 million) during the period.

YOU MAY LIKE