China-based tech firm Tencent announced that it will sell shares of its subsidiary Tencent Music on the US stock exchange.
Tencent did not deliver any other information in its announcement, such as timing or how much its initial public offering will be. However, recent reports show that moving to the US stock exchange will make Tencent Music worth $30 billion, comparing favorably to streaming services Spotify and Apple Music, which value at $26 billion and $10 billion, respectively. In fact, Spotify and Tencent Music own shares of each other as of last December.
In China, Tencent Music is essentially Spotify and Apple Music if the two teamed up. It dominates the market through platforms like QQ Music, Kuwo and KuGou. Across the platforms, it has 600 million users, including 15 million subscribers.
With an IPO, Tencent Music would be able to raise money for new content. And clearly, Hong Kong investors are pleased by the news – shares were up 2.5% on Monday and will likely continue to increase as more information about the deal arises.
Tencent is dominant in more areas than just music, too. With social media and gaming arms, the tech giant takes the best parts of Facebook, WhatsApp, Electronic Arts, and more. It is the fifth most valuable brand in the world, eclipsing companies like Visa, Facebook, AT&T (though maybe not after their merger), and fellow Chinese company Alibaba.
Tencent Music may not have the same success in the US as it did in China, especially as Spotify and Apple Music continue to grow in popularity. However, adding more money with shares will surely allow it to continue its expansion across the globe.
Featured image via Flickr/Chris Yunker