Due to volatile trading in major Chinese tech companies, NetEase has taken the decision to delay the $1 billion initial public offering of its music streaming service Cloud Village on the Hong Kong stock exchange.
Following the Cloud Village IPO’s approval by the Hong Kong Stock Exchange’s listing committee, preliminary discussions with potential investors were held last week. While due to launch this week, the IPO was put on hold after Chinese officials ordered a regulatory crackdown on Chinese tech companies.
NetEase aimed to raise $1 billion from Cloud Village’s initial public offering. Regulatory filings in May showed that NetEase also planned to retain at least 50% of the voting rights in the company following the IPO’s launch. The company previously announced in May that it would spin off Cloud Village and retain 62.4% ownership in the business.
With Chinese officials’ decision to apply regulatory scrutiny on tech companies in full force, NetEase stocks slid by 14% last week. This came as news broke out of China’s gaming sector being next in line for such monitoring.
The stock has since increased by 4.1% since Monday morning.
