China’s cloud services provider Kingsoft Cloud Holdings Ltd. shares rose 40% on Friday in the first major trading on the NASDAQ stock exchange.
The Beijing-based cloud computing service company raised $510 million in its initial public offering, pricing its shares at the midpoint of its suggested range of $16 to $18. The company priced an upsized transaction of 30 million American depositary shares (ADS), which represent about 13.9% of issued shares.
“Under the trends of AIoT and Internet of Everything (IoE), cloud services are really important,” company’s chairman, Lei Jun, also the co-founder of Chinese smartphone maker Xiaomi, said in an open letter on Thursday night. “Cloud service is an infrastructure, a platform and a service. As new infrastructure will serve the Chinese digital economy in the next few years, our cloud services will support the new infrastructures.”
Kingsoft Cloud’s Hong Kong-listed parent company Kingsoft Corporation said it would purchase up to $25 million worth of its affiliate’s shares. Xiaomi also expressed its interest in purchasing up to $50 million at the IPO price, which will equal to about a 14% stake in the company after the offering, according to the filings with the U.S. Securities and Exchange Commission.
The shares closed at $23.84 in New York trading on Friday, giving the company a market value of $4.77 billion. The company’s shares are trading on the Nasdaq Global Select market under the symbol KC.
Kingsoft Cloud’s market debut marked the first Chinese company listing in the United States since Luckin Coffee’s fraud scandal last month. The Chinese coffee brand has not been trading since April 11 after it revealed a large portion of its 2019 revenue was fraudulent which sent its shares down 89%. The Starbucks competitor is now facing severe regulatory probes and multiple lawsuits.