Meituan-Dianping shares have gone 5% above the HKD $69 it initially debuted at. At one point the share values jumped to almost 7% at HKD $73.85 during the morning trading hours. Biggest benefactor since the IPO launch was the company’s founder Wang Xing who saw his net worth surge to a whopping $5.3 billion.
The rise in the share prices shows that the investors have great faith in the company despite it posting huge losses in the first quarter of the year. The company provides a variety of services like online retail, booking vacations, online tickets, hailing cabs and movie ticket bookings through its one-stop-super-app.
The company, known to be aggressive in its growth strategies has created a lot of confusion on whether it can sustain its massive growth as its users have helped it generate a lot of revenue this year and despite that, it somehow posted huge losses too. But after its IPO launch, one thing is clear- the steep rise in its share price depicts that people have decidedly placed their faith in the Tencent-backed company.
The IPO launch will help Meituan-Dianping compete better in the market against Ele.me which is backed by Alibaba to impose its dominance in China’s trillion-dollar food delivery and online services industry.