PDD has seen its revenue increase since its founding in 2015
Pinduoduo, a Chinese e-commerce company, along with its shareholders, has announced the sale of over 50 million shares in a secondary offering, which could raise about $ 1.5 billion after the company’s public debut last year.
PDD, the acronym with which Pinduoduo is known in the stock market, has seen revenue increase since its founding in 2015, defying the belief that electronic business giants Alibaba Group Holding Ltd. and JD.com Inc. had an unassailable advantage on the market.
Founder Colin Huang built the PDD app as a mixture of commerce and entertainment, then lining up with Tencent Holdings Ltd. and incorporating its service into its WeChat messaging platform. Turnover, as a result of the move, grew about five times in 2018, worth almost $ 1.9 billion and the project will double this year to $ 4.1 billion.
In recent weeks, PDD shares have increased, allowing the company to raise money
But this expansion is expensive. Operational losses are estimated to have been $ 1.25 billion last year, according to data compiled by Bloomberg. The offer, from which PDD claims to receive $ 1.1 billion or $ 1.25 billion if subscribers exercise an option to purchase additional shares, will help fuel future growth.
Meanwhile, the actions of the PDD have increased in recent weeks, allowing more money to be raised from a secondary offer. The stock had grown by 35% this year through the most recent closing. In a letter to the shareholders included in the secondary offer and in the initial public offering, Huang stated that PDD is “not a conventional company”.
“Pinduoduo is dedicated to investing in the future and will always focus on the long term,” he wrote. “It might appear too aggressive or too conservative at times. However, it always follows the basic and simple principle – growing its long term intrinsic value.”
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