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Tencent Music delays $2 bil. IPO set for U.S.

Reuters HONG KONG (Reuters) — Tencent Music Entertainment has delayed its planned U.S. initial public offering (IPO) until at least November as the owner of China’s most popular music apps prefers to wait for global stock markets to stabilize, three sources said.

The music arm of tech giant Tencent Holdings is expected to raise at least $2 billion and was originally planning to launch its offering as soon as next week, the sources said.

However, Wall Street on Wednesday suffered its worst one-day drop in eight months, with the S&P 500 down 3.29 percent. The index dropped a further 2.06 percent on Thursday.

“Are they really going to launch into this window?” asked one source involved in the deal, adding that the company had plenty of cash. “Why try and jam something out now?”

Chinese shares have also fallen, with the CSI 300 index of mainland Chinese blue-chips down 4.8 percent to a 27-month low on Thursday.

“Given the recent challenging market conditions, it won’t be a good idea for the company to go ahead with the listing timetable. It makes more sense to wait till the market recovers a bit,” said another person with knowledge of the matter.

Tencent Music declined to comment. The sources declined to be identified as the information was not public.

At $2 billion, the IPO would be one of the largest by a Chinese company in the United States this year, behind the $2.4 billion raised by video streaming company iQiyi in March but ahead of the $1.6 billion garnered by online group discounter Pinduoduo in July.

In total, Chinese companies have raised $7.5 billion from U.S. markets so far this year — the biggest amount since 2014 — according to Refinitiv data.

Tencent Music filed for its IPO earlier this month, setting a placeholder sum of $1 billion for registration purposes.

The company owns streaming apps QQ Music, Kugou and Kuwo as well as karaoke app WeSing, and claims more than 800 million monthly active users.Speech

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