Losses exceed expectations, 'unicorn' VNG withdraws IPO application on US stock exchange

Unicorn VNG files to withdraw IPO from US stock exchange

According to information on the US Securities and Exchange Commission (SEC) website, on January 22, 2024, VNG Corporation decided to withdraw its application for an initial public offering (IPO).

The reason for the withdrawal of the application was not disclosed by VNG, and VNG's plan to submit a new application in the future also did not specify the time of the company's future offering registration.

The company lost its IPO bid on the US stock exchange in the first place. — Unicorn VNG has just withdrawn its IPO application on the US stock market (Photo TL)

Regarding the IPO of the technology "unicorn" VNG in the US market, in August 2023, the company announced that VNG Limited filed a registration application under form F-1 with the SEC.

Accordingly, VNG Limited, the largest shareholder of VNG, plans to offer Class A common shares on the Nasdaq under the code VNG. If the issuance is successful, 21.7 million shares will be listed on Nasdaq. However, the listing price of the shares has not been disclosed.

The news that VNG, a unit known as a Vietnamese technology unicorn, was listed on the US stock exchange caused a stir among investors. However, VNG later postponed its IPO plan in September 2023 due to unstable market conditions.

VNG's loss exceeds expectations by hundreds of billions in 2023

In terms of business activities, the unicorn VNG was originally a game company, established in 2004, originally named Vina Game Joint Stock Company (Vinagame), with a charter capital of 15 billion VND. After a long period of development, VNG has expanded into fields such as music sharing, video streaming, messaging, news portals, mobile payments...

In the third quarter of 2023, VNG recorded revenue of VND 2,332.9 billion, up 11% over the same period. Gross profit reached VND 997.6 billion, up 3.7%. Gross profit margin decreased from 44.9% to 41.9%.

Financial revenue in the period increased to VND28.2 billion, equivalent to an increase of 21.9%. Financial expenses also increased to VND52.5 billion while in the same period only recorded at VND700 million. Interest expenses are currently also accounting for VND29.4 billion.

In the third quarter, VNZ's selling expenses accounted for VND718.3 billion, a slight increase compared to the same period. In addition, business management expenses also accounted for VND334.9 billion, a decrease of nearly 12% compared to the same period. Business operations at affiliated companies are also losing up to VND29.4 billion.

After deducting all expenses, VNZ recorded a loss of VND 117 billion in the third quarter of 2023, down from the loss of VND 141.5 billion in the same period. VNG's accumulated revenue for the first 9 months reached VND 6,431.3 billion. The company is currently suffering an accumulated loss of VND 465.1 billion. Compared to the 2023 plan, VNG is currently at a loss of 82.2% of the plan.

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