Archives for July 17, 2018

Chinese discounter Pinduoduo aims for up to $1.63 billion in U.S. IPO

(Reuters) – Chinese online group discounter Pinduoduo plans to raise up to $1.63 billion from a U.S. listing, its latest filing with the U.S. Securities and Exchange showed, in what would be the second-biggest U.S. float by a Chinese firm this year.

Pinduoduo plans to sell about 85.6 million American Depositary Shares in an initial public offering (IPO) at a price range of $16 to $19 each, its filing late on Monday showed.

That values the three-year-old startup – which has yet to make a profit – at $20 billion to $24 billion, higher than its $15 billion valuation in April. Its free float will be 6.8 percent of enlarged share capital after a 15 percent “greenshoe” or over-allotment option which can be sold if there is demand, showed a term sheet seen by Reuters.

Two of the firm’s main existing shareholders – Tencent Holdings Ltd and Sequoia Capital – have each indicated an interest in buying up to $250 million worth of shares in the IPO, according to the filing.

The price range represents a 2020 price-to-sales ratio of 2.1–2.6 and a 2020 non-GAAP price-to-earnings ratio of 8.9–10.6, Thomson Reuters publication IFR reported.

The firm will open its book to investors on Tuesday and price the IPO on Wednesday of the following week, showed the term sheet. It expects to list on the Nasdaq under the symbol PDD.

Pinduoduo is the latest in a series of Chinese tech groups flocking to list offshore, seeking to replenish coffers amid ever-intensifying competition with domestic rivals, notably e-commerce firms Alibaba Group Holding Ltd and Inc, even as Sino-U.S. trade tension rattles global markets.

China’s Meituan Dianping, an online food delivery-to-ticketing services platform which rivals Alibaba-backed, is also looking to launch an IPO of over $4 billion in Hong Kong in coming months.

Pinduoduo, set up by former Google engineer Colin Huang in 2015, is also joining several sizable Chinese listings in New York this year. Chinese video streaming service provider iQiyi Inc raised $2.42 billion from a Nasdaq IPO in March, and Tencent Music Entertainment, China’s largest music-streaming firm, aims to raise up to 4 billion in a U.S. IPO in October.

In an initial filing, Pinduoduo, which allows consumers to group together to increase the discounts offered by merchants, said it had 103 million monthly active users of its mobile platform at the end of March.

Due to low-priced products and a larger user base in China’s smaller cities, the firm’s gross merchandise volume exceeded 100 billion yuan ($14.98 billion) last year, a milestone for Chinese e-commerce firms that took Alibaba’s Taobao marketplace five years and 10 years to reach.

Pinduoduo’s revenue has grown sharply, reaching 1.38 billion yuan in January-March from 37 million yuan in the same period a year prior. Its net loss, however, remained broadly steady at 201 million yuan.

China Renaissance, CICC, Credit Suisse and Goldman Sachs are advising Pinduoduo, according to the filing.

Reporting by Julie Zhu in HONG KONG and Nikhil Subba in BENGALURU; Additional reporting by Fiona Lau of IFR; Editing by Maju Samuel and Christopher Cushing

Forget Elon Musk. Read About These Surprising Heroes of the Thai Cave Rescue Everybody Else Forgot

If you’ve ever contributed to a team but didn’t get any recognition, I’ve got a story for you.

Even just figuring out their part in this story requires some guesswork. Finding them by name would probably be impossible. They’re probably just fine with never having their story told. But their story is worth telling.

The long line of problems

To understand their role, we have to quickly recount the tactical story of how the boys and their coach were rescued. We’ll number this to make it easy to keep track:

  1. We start with the team of international cave divers and Thai Navy SEALs who found and stayed with the 12 youth soccer players and their coach. These people are true heroes, as is the diver who lost his life in the effort, and who will be remembered for a long time.
  2. Of course, finding the boys was only step one. Getting them out was an incredibly challenging mission. As time ran out, rescuers made the dangerous call that they’d have to rig the boys in dive equipment, and bring them out partially submerged on an hours-long trip.
  3. This was difficult even for experienced cave divers. None of the boys could swim, let alone use dive equipment. So, the rescuers had to find a way to keep malnourished, scared kids comfortable during the rescue–and most importantly, avoid panic. The idea was basically the least bad option.
  4. They decided to sedate the boys during the escape. This was extremely dangerous, and the rescuers did not expect a 100 percent survival rate. But they felt there was no other choice. As Thai Navy SEALs and U.S. military officials explained it to the Thai government, according to The Washington Post, the choice was either “save most of them now, or lose all of them soon.”`

The Australian doctors

Anesthesia is a medical specialty, obviously. The rescuers needed people who (a) could dive and reach the boys, and (b) then administer the drugs in as safe a manner as possible.

Enter Richard Harris and Craig Challen, two Australian expert cave divers. Harris happens to be a practicing anesthesiologists, while Challen is a retired veterinarian. (They’re both big heroes in this story–widely praised, and rightly so.)

Even getting them into Thailand in the first place presented a problem. The Australian government reportedly had concerns about Harris and Challen’s legal exposure. Because even under ideal circumstances (like in a hospital), anesthesia carries some risk. Never mind in this incredible situation, in which they expected not all the boys would survive.

So, how do you work things out very quickly, and under extreme conditions, so that two foreign doctors volunteer to perform a risky mission in a foreign country, but find a way to exempt them from the country’s legal system if things go wrong? 

Better call the lawyers

An official source confirmed to Four Corners that Dr Challen and Dr Harris were given diplomatic immunity ahead of the risky mission, after negotiations between Australian and Thai Government officials.

Diplomatic immunity. Of course. Treat them like official Australian diplomats, as opposed to private citizen volunteers.

I’m a lawyer (currently non-practicing), and I spent a lot of time thinking about problems like this years ago in the U.S. Army JAG Corps. But this solution was so smart, straightforward and elegant–and I’m not sure I would have thought of it.

The negotiators for the Thai and Australian governments–and I’m going to go out on a limb and bet that some or all of them were lawyers–figured it out.

We’ll probably never know their names. But without them, there’d have been no legal protection for the Australian doctors in case something went wrong in this extremely risky rescue–and it’s quite possible the rescue wouldn’t have happened.

And to me, they represent all the thousands of other nameless people who came together to contribute, without knowing 

So, forget about Elon Musk. And forget about that pithy line from Shakespeare. Next time there’s a big emergency, first thing we do? Call all the lawyers.

By the way, here’s the Facebook post that Dr. Harris wrote on the way home to Australia after the rescue. Its tone of gratitude could teach some other players in this whole affair an important lesson.