VNG Ltd., a prominent internet startup based in Vietnam, has opted to defer its plans for a US initial public offering (IPO), as disclosed by an individual familiar with the matter. Initially slated to release 22 million shares, the company has chosen to exercise caution in light of varied performances exhibited by a trio of recently public enterprises this month. The anonymous source indicated that it would be prudent for VNG to await an upturn in market demand before proceeding with their IPO, suggesting a potential postponement until the following year.
When approached for comment, a spokesperson for VNG neither affirmed nor refuted the report. This move comes in the wake of notable fluctuations in the share prices of Arm Holdings Plc, a semiconductor design entity owned by SoftBank Group Corp., and Instacart, a prominent grocery delivery service, both of which dipped below their IPO valuations subsequent to their recent market debuts. In contrast, software provider Klaviyo Inc. enjoyed a robust trading inauguration, witnessing a surge of up to 32% in its stock value on Wednesday.
The decision of VNG to delay its US IPO offering coincides with the unforeseen triumph of VinFast Auto Ltd., an electric vehicle manufacturer. Following their merger with a blank-check firm, VinFast’s shares experienced an unprecedented upswing of 504% over a span of six days. Regrettably, their subsequent endeavors to expand beyond the Vietnamese market were met with challenges, resulting in a subsequent decline in stock value.
Established in 2004 under the moniker Vinagame, VNG initially ventured into the realm of game publishing. Over the years, the company diversified its portfolio, encompassing an array of services spanning music sharing, video streaming, and mobile payments. The ambition to embark on a US IPO venture has been in contemplation since 2017.
Given the varied fortunes witnessed by several firms that recently went public, the decision to hold off on the US IPO by VNG might be viewed as a prudent move. Waiting for an amelioration in market demand could prove beneficial before venturing into the public domain.
Source: Bloomberg
