Why was Xunlei able to successfully go public?
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Xunlei started applying for listing in 2011, but it was not until now that it succeeded, after three years of hard work. Why did Xunlei fail to go public in 2011, but succeed now? Xunlei submitted its prospectus to the US Securities and Exchange Commission (SEC) for the first time in June 2011, but encountered the crisis of Chinese concept stocks. Xunlei executives were unwilling to "go public at a loss", and canceled the IPO at the last minute. In 2012, Xunlei encountered a copyright crisis again. The MPAA (Motion Picture Association of America) claimed that Xunlei's offline downloads infringed the copyright of the MPAA and demanded negotiations with Xunlei, otherwise it would sue Xunlei. Xunlei itself is also facing large-scale copyright disputes, which has delayed Xunlei's listing plan again and again. And just last night, Xunlei successfully landed on the Nasdaq stock trading market in the United States, with an opening price of US$14.21, an increase of 18.4% from the issue price of US$12. Its current market value has exceeded US$1 billion. 1. Joining hands with Xiaomi increases the imagination space for listing Xunlei's E round of financing was led by Xiaomi with an amount of US$200 million, followed by Kingsoft Software and Xunlei's original investors Morningside Venture Capital and IDG with an amount of US$110 million, with a total investment of US$310 million. This huge amount of financing not only enriched Xunlei's cash flow, but also fully opened up cooperation with Xiaomi. This investment is not a venture capital, but a strategic investment. At the business level, Xunlei's cloud acceleration technology is fully open to Xiaomi, and Xiaomi's hardware products will have built-in Xunlei's related services, such as Xiaomi Box and Xiaomi TV built-in Xunlei Kankan. In 2013, Xiaomi sold a total of 18.7 million mobile phones, and MIUI users reached 30 million. Xunlei obtained huge channel resources through Xiaomi, and can convey its own applications and services to more users. Not only that, Xunlei's listing story is even more attractive. Xunlei CEO Zou Shenglong said in an interview with Tencent Technology's IPO that the focus of Xunlei's cooperation with Xiaomi is on the mobile terminal and smart home fields. Strengthening the two concepts of "mobile Internet" and "smart home" will make it easier to gain recognition from foreign investors, or at least attract attention. 2. Copyright risks are gradually eliminated. The IPO prospectus submitted by Xunlei shows that between 2011 and the first quarter of 2014, Xunlei was involved in 366 lawsuits involving copyright issues, of which 96.4% had been withdrawn or judged before the end of March 2014. Among them, Xunlei only lost 3 lawsuits and had to pay a total of only RMB 56,000 in compensation. The copyright disputes faced by Xunlei are decreasing. At the same time, before the IPO, Xunlei reached a "Content Protection Agreement" with the American Film Association to restrict illegal downloads of American dramas and movies, clearing copyright obstacles for the IPO. Xunlei also initiated and hosted the "CC2014 China Internet Copyright Protection Action Plan", and jointly opposed piracy with video websites such as iQiyi and Youku, which was recognized at the government level. 3. Revenue increased significantly and valuation dropped significantly According to the financial report released by Xunlei, Xunlei's revenue was US$87.5 million in fiscal year 2011, US$148 million in fiscal year 2012, and US$180 million in fiscal year 2013. As of March 31, 2014, Xunlei had cash and cash equivalents of US$302 million. The significant improvement in financial conditions is conducive to enhancing investors' confidence in Xunlei. At the same time, Xunlei's valuation has dropped significantly, squeezing out the "bubble". In 2011, Xunlei's valuation during the IPO roadshow was US$1.5-2 billion, while this year when Xunlei submitted its prospectus, its valuation was US$630-760 million, a valuation reduction of more than half. 4. Better listing window Since the second half of last year, Chinese concept stocks have ushered in the best listing window. During this period, companies such as 58.com and Qunar.com have successfully listed and their stock prices have risen sharply. Since 2014, many companies have also submitted prospectuses to the US SEC, either publicly or secretly. Previously, Xunlei's listing encountered a capital cold wave, and the listing window for Chinese concept stocks was closed. Not only Xunlei, but also companies such as Lashou.com, Shanda Literature, and CAR Inc. announced the suspension of their listing on the eve of their listing. As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity. |
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