Razer has continued a winning streak of IPOs from Asian companies after its share price surged as much as 41 percent up on its first day of trading on the Hong Kong Stock Exchange.
The company, which makes accessories for PC gamers, laptops and is preparing to sell its first smartphone, raised $529 million from the sale of 1,063,600,000 shares. After deductions, Razer estimated its take-home to be around $504 million.
The offering was massively over-scribed, to the point that Razer restructured the listing to offer more shares to local retail investors in Hong Kong. The final mix was 50-50 between local and global shares.
The listing follows the wildly successful Hong Kong IPO for Tencent-backed China Literature, which raised over US$1 billion last week and saw shares jump 86 percent after its first day of trading, and Chinese search engine Sogou which went public on the New York Stock Exchange.
Razer said in its initial prospectus that it plans to invest the capital raised on R&D and new products. Already it has expanded into smartphones, audio equipment, and payments via acquisitions. The company released details of its first phone in recent weeks which will begin shipping November 17.
The U.S.-Singapore company makes three-quarters of its revenue from selling accessories like mice, headphones and keyboards for gamers, but it plans to introduce software services and push its other hardware products.
Razer hasn’t been profitable since 2014, posting losses of $20 million and $59.6 million in 2015 and 2016, respectively. The former, it said, was largely down to the cost of an aborted U.S. listing, while its most recent financial year saw an increase in stock options and more R&D. Excluding that compensation, Razer’s loss for 2016 was a more modest US$20.6 million.
We’ll discuss the IPO in more detail with Razer CEO Min-Liang Tan at the upcoming TechCrunch Meetup in Singapore on November 21. Sea Chairman Nick Nash, fresh from an $880 million U.S. IPO, will also join to discuss his company’s progression from startup to the public markets. It’s sure to be a great event — stay tuned for ticket info coming this week.
Note: Article updated to correct that Razer’s share price closed 18 percent up, but was priced as high as 41 percent during the trading day.