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Momo Stock Surges 20% As Alibaba Vice Chairman Joins Board
Momo Inc., one of China’s most popular social networks, saw its stock leap almost 20 percent following an announcement that Alibaba Holdings Group Ltd. vice chairman Joseph Tsai has joined the company’s board.
Momo received a privatization bid in June 2015, just six months after their NASDAQ listing in December 2014. Tsai’s involvement suggests that Alibaba could have a hand in the bid, which is currently led by Momo CEO Tang Yan, with participation from Matrix Partners China and Sequoia Capital.
Momo’s stock rose to $12 on Tuesday, it’s highest peak since May 2015. The company’s stock tumbled 40% in the second half of the year as progress on privatization stalled alongside general volatility in the Asian markets.
Momo joins a number of Chinese tech companies looking to re-list in China. At the time of the initial privatization bid in June, Momo was the thirteenth company to plan a delisting from the US markets in 2015. Just a week earlier Chinese internet giant Qihoo 360 had also revealed privatization plans.
Momo initially began as a location-based social app for strangers, and has since extended into a wider networking platform. The company made a muted attempt to enter the US market with the release of a localized app called ‘Blupe’ in late December 2014, a month after their IPO.
The app failed to gain significant traction and the company has since refocussed efforts on the Chinese market. In September Momo launched ‘XianChang’ — meaning “on the spot”, a live concert broadcasting platform. The product targets China’s high demand for online streaming content, a vertical in which Alibaba has also been aggressively expanding.
Momo also has crossover with Alibaba in the digital gifts business and ‘lucky money’ drives. Acquiring the privatized social network could potentially help Alibaba extend into areas dominated by Tencent’s highly-popular WeChat and QQ social ecosystems.