Momo CEO Tang Yan offers buyout to the Chinese mobile chat app. (Photo : www.nasdaq.com)
Momo Inc's CEO Tang Yan, along with a group of investment companies, offered a buyout to the Chinese mobile app, buying all its shares for U.S.$1.9 billion.
The move comes six months after the firm listed in the United States.
Momo is the latest to receive offers to quit their U.S. listings and join the privatization bandwagon. Recently, Chinese tech luminaries are betting on higher share valuations in the country as stock markets have been witnessing vital improvements.
The mobile app allows users to find their friends based on exchanged messages, videos and photos, and locations. As of March, it has a 78.1 million active subscribers.
Tang and the buyout consortium currently owns around 47 percent of Momo, securing a total voting power of about 84 percent.
For Summit Research analyst, Henry Guo, accepting the offer is but a strategic move for Momo. "There is no comparable company in the United States, so US investors may not fully understand the company's business model," he explained.
"They (Momo) believe if they go back to China and trade on the Shanghai stock market, their users and investors will know what they are doing, and they can get a better valuation," he further stated.
Momo went public in December of last year, a period when CEO Tang faced allegations of information theft from its former employer, NetEase Inc.
The buyout consortium is composed of Matrix Partners China II Hong kong Ltd, Huatai Ruilian Fund Management Co Ltd. and Sequoia Capital China Investment Management LP.
