Tencent Music (TME) has filed for a U.S. IPO to list on the New York Stock Exchange and NASDAQ Global Market with the goal of raising $2 billion. The Tencent F-1 filing offered an unusual and revealing peak inside China's largest music streaming service.
The Tencent F-1 filing with the U.S. Securities and Exchange system offered a look inside a growing and profitable music streaming service.
In a sector where the words streaming and profitable almost never go together, $526 million in gross profit - up 151.7% year-on-year - on $1.3 billion in total revenue, is particularly impressive.
On Monday October 1st, Tencent entered into share subscription agreements with WMG China LLC, an affiliate of Warner Music Group, and Sony Music Entertainment for 68,131,015 shares in exchange for an investment of approximately US$200 million. Under the agreements, all shares held by Warner and some shares held by Sony will be subject to a lock-up that rangers fro, April 1, 2019 and October 1, 2021.
"We believe that such transactions will help deepen our strategic cooperation with our major music label partners and better align our interests with theirs to create long-term value for our users and shareholders."
Spotify owns 9.1% after to a ‘stock swap’ late last year.