Trading On The Floor Of The NYSE (Photographer: Michael Nagle/Bloomberg)

Tencent-Backed Qutoutiao Doubles in Frenzied Trading Debut

(Bloomberg) -- Qutoutiao Inc., the Chinese news and video aggregation app backed by Tencent Holdings Ltd., more than doubled in its U.S. trading debut after pricing its shares below range in a downsized IPO.

Qutoutiao closed up 128 percent at $15.97 after almost tripling earlier Friday, giving it the biggest first-day increase of a significant U.S.-listed IPO this year. The stock’s volatile early trading triggered four halts when the price surged in the first half hour after it opened. About 17 million shares changed hands Friday, according to data compiled by Bloomberg.

The Shanghai-based company sold 12 million American depositary shares for $7 apiece to raise $84 million. The shares, reduced from the 16 million that company had planned to sell earlier, were marketed at $7 to $9 each.

The company’s first-day rise topped that of Zscaler Inc., which rose 106 percent in its March 16 trading debut, according to data compiled by Bloomberg, excluding a $3.2 million offering.

Qutoutiao said it plans to use the IPO proceeds to expand and enhance its content and improve its products, as well as for marketing and general corporate purposes including potential acquisitions.

Qutoutiao is the second Chinese company to list in the U.S. this week and see attention-grabbing trading. Electric-vehicle maker NIO Inc. closed up 76 percent on its second day of trading Thursday, following a 5 percent rise on its first day after a $1 billion IPO. NIO’s shares, which rose as much as 19 percent Friday, closed down 15 percent to $9.90

Qutoutiao is the 25th Asia-based company to list on New York exchanges this year to raise a combined $7.4 billion in IPOs, according to data compiled by Bloomberg. That compares with two-dozen listings in all of 2017 that raised $4.9 billion in new share sales.

56 Minutes Daily

The company, whose name means “fun headlines,” has about 17.1 million daily active users who spend about 56 minutes on the app daily, according to filings with the U.S. Securities and Exchange Commission. Monthly active users total about 48.8 million. The company has sought to work closely with stakeholder Tencent in various areas.

Qutoutiao’s net revenue for the first half of 2018 jumped to $108.5 million, from $16.2 million from the same period a year earlier. As it focused on growing its user base and improving services, the company’s net losses mounted, rising to $77.7 million for the first six months of 2018 from $4.3 million a year earlier, according to a filing.

The offering was led by Citigroup Inc. and Deutsche Bank AG. Qutoutiao is trading on the Nasdaq Global Market under the symbol QTT.

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