What happened: News aggregator Yidian Zixun, a competitor of Bytedance’s Jinri Toutiao app, appears to be preparing for an IPO. Phoenix New Media has announced its intent to sell off most of its shares in Particle, Yidian’s parent company. An internal email from CEO Ren Xuyang said that the move is part of Yidian’s preparation for an IPO on Shanghai’s new tech startup board, according to 36kr. Ren wrote that Yidian will be able to restructure its shareholder setup after Phoenix’s shares drop from 37.6% to 5.6%. The news app unicorn also recently finished a $500 million round of funding.
Why it’s important: Until the selloff happens, Phoenix is Particle’s largest shareholder, with smartphone makers Xiaomi and Oppo also holding sizable stakes. Yidian’s growth has been boosted by several rounds of funding, with the company reaching a valuation of more than $1 billion in 2017. A debut on Shanghai’s new board, which is designed to have looser trading limits than the Shenzhen exchange, may provide even more support. Competitor Jinri Toutiao’s parent company, Bytedance, is rumored to also be going public in Hong Kong this year, possibly to counteract the effect of government crackdowns. With China stock markets rallying so far this year, momentum is gathering, though disappointing returns for 2018’s hottest tech company IPOs show how quickly that could change.