Bilibili Raises $2.6 Billion ahead of Its Public Debut in Hong Kong

Chinese technology company and video game publisher Bilibili Inc (NASDAQ: BILI) has raised 20.2 billion Hong Kong dollars ($2.6 billion) ahead of its public listing in Hong Kong. As reported by CNBC, the firm noted it priced the 25 million shares it issued for the listing at 808 Hong Kong dollars each. The initial plans to pursue a secondary listing were first revealed earlier in January.

It is not uncommon for American-listed Chinese firms to seek a secondary listing in Hong Kong. The situation is notably now more imperative following the relationship between the United States and Chinese officials that is still not improving. The solace being sought per the secondary listing is perhaps to provide an alternative market and investor base in the advent of any trade or regulatory showdown. Alibaba Group Holding Ltd (NYSE: BABA), and JD.Com Inc (NASDAQ: JD) are amongst the prominent names that have explored this route.

The 808 Hong Kong Dollar listing price equates to around $104.06 per American depositary share (ADS) according to the company. The amount being raised by the firm could increase, should underwriting investment banks decide to trigger the so-called over-allotment option to issue another 3.75 million shares, per the CNBC report.

Bilibili’s revenue generation model revolves around mobile gaming and the selling of virtual items to its platform users that gift them to their favorite streamers. Following the public listing moves, Bilibili will commence trading in Hong Kong on March 29 under the code “9626.”

Will Bilibili Become Profitable Following Its Hong Kong Public Debut?

According to a report from the South China Morning Post (SCMP), the $2.6 billion total sums raised through the share offering fell slightly short of the expected target of $2.8 billion as investors expressed doubts about the prospects of Bilibili amidst its non-profitability tag.

Though the platform has reportedly been able to maintain a Monthly Active User base of 202 million as of Q4 2020, up from 130.3 million users in the year-ago period, investors are skeptical about the firm’s prospect to grow or double this user base, a benchmark that can translate into more premium paying customers.

The plan to turn profitable and to remain so is the primary growth target of any company, either publicly listed or private, and Bilibili will look to impress its shareholders both in the US and Hong Kong by striving to top its $588.5 million revenue generated as of the fourth quarter 2020. A key recommendation to achieve this per the SCMP report is to devise means to get customer loyalty, both by the total time spent on the platform as well as the ability to attain a high turnover per visitors that subscribes to its premium contents.

Bilibili shares closed Tuesday’s session at $105.99 down 0.83%. The company’s stock has further dipped by 0.77% in the pre-market today.