Shares Double the IPO Price in a Week, Huya Announces Over-Allotment in Full
(Update: At the close on Thursday, shares of Huya had dropped from the morning high of $24.35 per American depositary share to $20 per share, a decline of 11 percent on the day.)
Huya Inc. (NYSE: HUYA) announced today that its underwriters have exercised their over-allotment option in full and purchased an additional 2,250,000 American depositary shares at the initial public offering (IPO) price of $12 per share.
Credit Suisse Securities, Goldman Sachs, and UBS Securities were joint bookrunners for the offering, and Needham & Co. acted as co-manager.
The Chinese game-streaming platform debuted Friday on the New York Stock Exchange and sold 15 million shares, raising $180 million. With the over-allotment, Huya has raised $207 million. The closing of the over-allotment option happened at the time of the closing of the IPO on May 15.
The stock of the company has been rising quickly. On the opening day Friday,
Huya shares closed up 34 percent from the IPO price of $12 per ADS. In the past week,
shares have nearly doubled, trading at $23.25 per ADS Thursday morning. (Source: Thomson Reuters Eikon)
E-sports, or competitive gaming, has exploded in China in the recent years. The market was projected to more than double to $33 billion by 2022, based on Frost & Sullivan research cited in Huya&`#`39;s prospectus. Professional tournaments have boosted sponsorship, advertising, and media-rights fees. Last year&`#`39;s "League of Legends" championship, hosted in Beijing&`#`39;s Olympic Bird Nest stadium, attracted 40,000 spectators and 60 million fans online.
Huya&`#`39;s 93 million monthly active users in the first quarter placed the gaming platform atop the leader board, though Chinese livestreaming site Douyu has been following closely behind.
Like other broadcasting apps, including Huya&`#`39;s parent YY Inc. (Nasdaq: YY), the platform&`#`39;s business model has been relying on membership fees and virtual gifting for the users&`#`39; favorite gamers.