Zhihu Raises $523 Million on NYSE Amid Renewed Delisting Fears

The Q&A platform, backed by Chinese giants, is to lift off on Wall Street today.
CapitalWatch StaffMar 26,2021,13:46

Zhihu Inc., China’s largest Q&A platform, raises $522.5 million Friday on the New York Stock Exchange after pricing at the low end of the expected range as uncertainties hang over continued Chinese listings.

The company sold 55 million American depositary shares at $9.50 apiece in an offering that valued it at $5.3 billion. It is set to lift off this morning on Wall Street under the ticker “ZH.”

According to the prospectus, concurrently with the IPO, Zhihu has carried out a private placement of shares in the amount of $250 million to affiliates of four investors: Alibaba Group (NYSE: BABA; HKEX: 9988), JD.com, Inc. (Nasdaq: JD; HKEX: 9618), Tencent Holdings (OTC: TCEHY; HKEX: 0700), and Lilith Games.

Credit Suisse Securities (USA) LLC, Goldman Sachs (Asia) L.L.C., and J.P. Morgan Securities LLC are acting as the representatives of the underwriters.

Zhihu, based in Beijing, is the largest Quora-like online community in China in terms of mobile users and revenue, according to China Insights Consultancy (CIC). In December 2020, Zhihu counted 43.1 million content creators and 75.7 million average MAUs.

In 2020, revenue doubled to $207.2 million according to the filing, while losses narrowed 48% year-over-year to $79.3 million, according to the company’s filing.

The IPO comes as U.S.-listed Chinese companies are facing the threat of delisting if they refuse to open their books to U.S. auditors. This week, Chinese giants, including Alibaba and JD, lost billions in market value after the U.S. Securities and Exchange Commission adopted the Holding Foreign Companies Accountable Act on Wednesday.

The Act, passed by the Trump administration as his term neared its end, gives certain foreign companies three years to submit to PCAOB auditing and disclose any ties to the Chinese government. If the terms are not met, the firms will face delisting from U.S. stock exchanges.

Topics:ZH, Zhihu, IPO, Alibaba, Tencent, JD