NEW YORK • China’s upstart e-commerce company Pinduoduo Inc (PDD) and its shareholders led to sell more than 50 million shares in a secondary offering that could raise about US$1.5 billion (RM6.13 billion) after the company’s public debut last year.
The Shanghai-based company plans to sell 37 million American depository shares, while investors market 14.8 million, according to a securities filing. Its shares closed at US$30.33 in US trading overnight, then dipped after hours to about US$29. The lock-up period for PDD’s shares expired last month and the selling shareholders include Banyan Partners, Sequoia, Sun Vantage Investment and Lightspeed China.
Founder Colin Huang built the PDD app as a blend of commerce and entertainment, then aligned himself with Tencent Holdings Ltd by embedding his service into its WeChat messaging platform. Revenue grew an estimated five-fold in 2018 to about US$1.9 billion and are projected to double this year to US$4.1 billion.
But this expansion is expensive. Operating losses are estimated to have been US$1.25 billion last year, according to data compiled by Bloomberg.
The offering, from which PDD said it expects to receive US$1.1 billion or US$1.25 billion if underwriters exercise an option to purchase additional shares, will help fuel future growth.
PDD’s shares have climbed in recent weeks, allowing it to raise more money from a secondary offering. — Bloomberg