IPO Watch: Youdao Inc. ADRs

Article Excerpt

YOUDAO INC. ADRs is the education unit of Chinese videogame maker NetEase (Nasdaq symbol NTES). It provides online courses for pre-school, K-12 and college students in China to over 100 million active users per month. The company also has dictionary, translation and writing tool websites. Youdao lets users access its services for free, so it gets most of its revenue from selling online advertising. In the six months ended June 30, 2019, it lost $24.5 million U.S. on revenue of $79.9 million U.S. The company will sell 5.6 million ADRs to investors at between $15 and $18 each. That should raise $84 million. The shares would trade on the New York exchange under the “DAO” symbol. Youdao plans to use the cash to enhance its current products and expand to other countries . The company’s large user base gives its speculative appeal. However, ongoing trade tensions between the U.S. and China could dampen investor enthusiasm for Chinese company IPOs. We’ll keep an eye…