Business

Tencent Music Company lands in trouble days into its initial public offering in the US

Tencent Music Company is one of the largest Music streaming applications in the world. It was founded in 2016 after the high profile merger of QQ Music with China Music Corporation. It bought the music corporation to strengthen its hold in the music streaming industry. Recently, Sony and ATV Music Publishing bought a stake in Tencent Music Company which made a huge difference as well.

Currently, it is the largest music company in China. Its music apps like Kugou, Kuwo and QQ Music have over 700 million users. Apart from this, there are over 120 million paid subscribers. The market share of these three apps of Tencent Music Company is 56% in China. That said, it is also looking to expand as it filed for IPO’s worth $2 billion in the USA.

Tencent Holdings Limited, the main company is a giant in China and also all over the world. Tencent is one of the world’s largest venture capital firms and investment corporations, one of the world’s most valued technological companies and also one of the biggest gaming companies in the world as well. It was founded in 1998 and specialized in internet services, Artificial Intelligence (AI), and also computer technology.

Tencent has hundreds of subsidiaries. It has subsidiaries and also associates in almost all the fields which come under technology. Fields like Artificial Intelligence, Renewable Energy, Natural Resources, Consumer Technology, Streaming Media, Robotics, Food Delivery, Courier Services, Internet Services, Education and many more.

However, one of its major applications or ventures is WeChat. WeChat is one of the most used applications not only in China but all over the world. It has over 800 million users and all its features are widely used. Tencent has developed a superapplication of sorts with WeChat. One can pay, book a cab, scan pages and do many things in one application. It merges other applications within itself so that one doesn’t have to leave the app to do other things. Tencent’s superapplication is supposed to be the future.

However, it has landed in big trouble recently. A Chinese investor, Hanwei Guo has filed a motion for discovery in the United States. This is the aftermath of him accusing Tencent Music Entertainment’s (TME) co-president of using delinquent methods to force him to sell stakes he owned in Ocean Music. Ocean Music became a part of TME when QQ Music merged with China Music Corporation.

Guo who revealed that he had invested $26 million in Ocean Music after repeated invitations from the company. He was promised that the company would yield profit in 2013, a year after Han’s investment. After that in three years, the company will go public. However, nothing of this sorts happened as the Han was later informed to sell his stake by Guomin Xie Guo, the co-president of TME. He was misinformed by Xie that the company is failing and threatened him to sell his stake.

Hanwei has requested for information from JP Morgan Chase and Co, Bank of America Corp. Deutsche Bank AG and many others which are working as underwriters for TME’s IPO. This news hits TME hard because it is days into its initial public offering and might have an effect. It had delayed its IPO because of poor stock market conditions around the world. TME is planning to build around $1.23 billion. Price of each share is to be around $13 to $15.

– Unmesh Phule

 

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  1. […] this issue. On the other hand, TCL has moved way ahead in the game with its collaboration with Tencent and Suning Sports in China. As we all know, Tencent owns popular apps such as Wechat, PubG and […]

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