Chukong Technology to Delay Nasdaq IPO
China News, 5/22/14
Chen Haozhi, CEO of Beijing-based mobile game developer and operator Chukong Technology, revealed in an internal email yesterday that the company has decided to postpone its initial public offering due to a low valuation given to the company by the US capital market. Chukong plans to keep its IPO prospectus on file with the US Securities and Exchange Commission (SEC). In the next several quarters, Chukong will separate its gaming and platform businesses to allow for faster development of the company's platform operations.
According to the email, Chukong was valued at only USD 540 mln because the company is still perceived merely as a game developer. In addition to game development and operation, the company also has game engine and game developer platform businesses, as described by Chen. The platform business does not currently earn any revenue, thus its operating costs cut into the net profits of the company's mobile gaming business. One year ago, US e-commerce giant Amazon offered to purchase Chukong's game engine business for USD 600 mln.
On April 19, Chukong filed an IPO prospectus with the SEC to raise up to USD 150 mln through a listing on the Nasdaq. On May 16, the company revealed that it would list under the symbol "NEXT."
Editor's Note: For more background on this topic, please see "Chukong Files for USD 150 Mln Nasdaq IPO" MD 4/18/14 issue, "Chukong Records Q1 2014 Net Income of RMB 13 Mln" MD 4/29/14 issue and "Chukong to List on Nasdaq under Ticker 'NEXT'" MD 5/15/14 issue.
Keywords: bourse game engine mobile gaming IPO Nasdaq valuation wireless Chen Haozhi Chukong NEXT game developer game operator
Sending
