Despite rising tensions between U.S. and China that are spilling into the financial sector, Chinese grocery delivery company “Dada” went ahead with its IPO on the Nasdaq on Friday.
The Walmart-invested company went public under the ticker “Dada” on the Nasdaq with a valuation of $3.5 billion. Founder and CEO Philip Kuai played down the impact of U.S. and China tensions as temporary and struck a confident tone in the long-term prospects of Dada’s business, which has benefited from the coronavirus outbreak.
His call for increased regulation comes as the U.S. Congress reviews a bill that’s putting pressure on Chinese companies to delist from American stock exchanges.
“Dada” warned in its prospectus of the risk the stock could be delisted. According CNBC, the company added in a statement it wouldn’t rule out other capital market activities, but said it’s rather early to comment on the possibility of a dual-listing given its recent Nasdaq IPO. According to the company, the stock has been priced at $16 a share and ended up offering around 20% more shares than originally planned due to high demand. Shares closed one cent lower after a volatile opening day.At least 8 Chinese companies have gone public in the U.S. so far this year, matching that of last year, told Matthew Kennedy, senior IPO market strategist at Renaissance Capital, which sells pre-IPO research to institutions and he added that at least four more have filed.
Even though analysts said Hong Kong, London and even mainland China would become more attractive places to list as tensions rise with the U.S., affiliation with the Nasdaq or New York Stock Exchange brands holds allure for many Chinese companies.
Nelson Griggs, Nasdaq Stock Exchange President, congratulated “Dada” via a short video. “There’s absolutely no doubt that Dada has pioneered the evolution of mobile-on-demand service in China, and you are so well-positioned for future growth and success,” Griggs said. “We look forward to supporting your continued growth as a Nasdaq-listed company for many years to come.”