Despite the ongoing economic tussle between the U.S. and China, Chinese-owned companies are eagerly looking for listings in the U.S. market. The mobile gaming company Playtika Ltd. completely owned by Chinese investors is seeking a $1 billion IPO in the U.S.
If Playtika succeeds to raise this capital, it would value the company at $10 billion. Playtika said that the attempt for an IPO is a smart move amidst the rise in mobile gaming during the COVID-19 pandemic. During the lockdown, this mobile gaming platform has seen more consumers using its services. The company has over 27 monthly active users as per its website.
Founded in 2010, Playtika is an Israel-based mobile gaming company. However, in 2011, the U.S. Gaming giant Caeser Interactive acquired Playtika acquired the company. But just four years later in 2015, Caeser Interactive filed or bankruptcy protection and sold the company as part of its cash-raising efforts.
Playtika is popular for its casino-themed games and operates other apps like Solitaire and Poker. As per the Reuters’ exclusive report, Playtika has now hired banking giants like Morgan Stanley and others to underwrite the IPO. Sources said that Playtika is looking to going public later this year or early 2021. However, the sources added that the “timing, valuation and deal size” will be subject to market conditions.
The IPO market is catching up with the heat as investors turn eager to invest in new companies. The investor sentiment is that quality IPO could help them benefit from the expected economic recovery after lifting the lockdown restrictions.
Nasdaq Plans to Tighten Listing Rules for Chinese Companies
With the ongoing economic war between U.S. and China, the U.S. Government has considered new restrictions on the public listing of Chinese companies. This move by Nasdaq is likely to make it even harder for Chinese companies to debut on the U.S. stock exchanges.
This move comes amidst concerns that China has close ties with powerful insiders in the U.S. market. Reportedly, Chinese companies leverage this and conduct IPOs with a lack of accounting transparency. As per a CNBC report last month:
“Nasdaq also unveiled some restrictions on listings last year, seeking to curb IPOs by small Chinese companies. Their shares often trade thinly because most stay in the hands of a few insiders. Their low liquidity makes them unattractive to many large institutional investors, to whom Nasdaq is seeking to cater to”.
For the first time, Nasdaq has also put a minimum value on the size of the IPO pegged at $25 million. Besides, Nasdaq has also said that it will audit the small U.S. firms that audit the accounts of Chinese IPOs.
Please visit out IPO news section, to find out more updates on this topic.