Xunlei, China’s online entertainer with offerings include popular download tool and online streaming service filed yesterday to withdraw its IPO, citing deteriorating European debt crisis and gloomy U.S. economy as main causes.
This isn’t the first time the Shenzhen-based company had a second thought on its initial public offering. After filing with the regulators to go public with an aim to raise up to US$ 200 million in this June, Xunlei which is partly owned by Google postponed its IPO several times alongside other Chinese companies such as Shanda’s online literature subsidiary Cloudary. The drastic shift in pubic market, as reflected by dozens of Chinese companies chose to postpone or withdraw their IPO until market condition improve combined with investors’ concerns over “VIE” structure casted a shadow over these companies already glimmer IPO picture.
According to its SEC filings, Xunlei generated US$ 15.36 million in revenue in the first quarter of this year, up 98% from a year ago. JPMorgan and Deutsche Bank were hired as lead underwriters for Xunlei’s offering.
Xunlei’s co-founder Shenglong Zou is the company’s biggest shareholder with a 27.5 percent stake while Google owns a 2.8 percent stake.
Or, they failed to go IPO because a business model based on theft is not viable for the long term.
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