Cheetah Mobile Gains in Trading Debut After $168 Million IPO

Cheetah Mobile Inc. (CMCM), the Chinese maker of security software that’s backed by Kingsoft Corp. (3888) and Tencent Holdings Ltd., rose in its trading debut after raising $168 million in a U.S. initial public offering.

After rising as much as 17 percent the shares ended trading in New York today at $14.10, after the IPO was priced at $14. The company plans to use the IPO proceeds for international expansion, technology investment and research and development, as well as potential acquisitions, according to the offering prospectus.

As part of the IPO, Cheetah is also selling a stake to China’s largest search engine, Baidu Inc., the document shows. Kingsoft will hold about 54 percent of the voting power at Cheetah after the offering, while Tencent will hold 18 percent, about the same as before the deal for both companies, the prospectus shows.

“Our goal is to become a first-tier mobile Internet company,” Sheng Fu, the chief executive officer of Cheetah Mobile, said in a telephone interview with the assistance of a translator. “Mobile and user growth makes our company attractive to investors globally.”

Cheetah Mobile’s applications had 362 million monthly active users as of March, an 80 percent jump from the year-ago period, according to the filing.

The IPO was managed by Morgan Stanley, JPMorgan Chase & Co., and Credit Suisse Group AG. Cheetah Mobile’s shares are listed on the New York Stock Exchange under the symbol CMCM.

To contact the reporter on this story: Leslie Picker in New York at lpicker2@bloomberg.net

To contact the editors responsible for this story: Mohammed Hadi at mhadi1@bloomberg.net

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