VC-backed Cheetah Mobile posts modest gain after $168m IPO
Cheetah Mobile, formerly Kingsoft Corporation’s internet security software division, ended its second day of trading on the New York Stock Exchange at a slight premium to its IPO price, following a $168 million offering.
The company sold 12 million American Depository Shares at $14 apiece, having set an indicative range of $12.50-14.50. The stock opened at $15.25 on Thursday and touched a high of $15.89 before slipping back to $14.14. A marginal gain followed on Friday with the stock closing at $14.26.
Tencent Holdings and Matrix Partners hold stakes of 17.8% and 6.2%, respectively. Neither group sold any shares in the offering. Kingsoft remains the majority shareholder with 53.5%.
Cheetah Mobile was created in 2009 as part of a restructuring of Kingsoft, which saw its three major subsidiaries - covering enterprise software, security software and gaming - spun out so they could operate with greater independence.
Tencent and Matrix invested in the company in 2011 through a purchase of Series A shares. The former paid $17.3 million for 95.24 million shares while the latter picked up 7.17 million shares for $1.3 million. In 2013, Tencent bought 110.2 million Series B shares for $46.9 million.
Cheetah Mobile had 329.5 million monthly active users across all of its applications as of December 2013. Its primary businesses include a junk file clearing and privacy protection service, a computer battery optimization tool, an anti-virus software solution and a safe internet browser.
The company reported a net income of RMB62 million ($10.2 million) in 2013, up from RMB9.8 million the previous year. Revenues rose from RMB287.9 million to RMB749.9 million over the same period.
Several other Kingsoft subsidiaries have also received VC backing. Morningside Technologies, GGV Capital and Shunwei Ventures - VC firm set up by Lei Jun, who also co-founded Kingsoft and currently serves as the company's chairman, committed $50 million to the enterprise software division, Kingsoft Office Software, last November.
Xiaomi Ventures, a corporate VC unit of Chinese mobile phone maker Xiaomi - also founded by Lei - invested $20 million in the games division, Westhouse Group, in February. Xiaomi has another investment in Kingsoft Cloud, a smaller cloud computing subsidiary.
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