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Alibaba joins Momo buyout group, sparking record rally in US

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Alibaba Group Holding Ltd's finance affiliates have joined the group seeking to buy out Momo Inc, sparking a record rally in the Chinese dating app maker's stock.

[NEW YORK] Alibaba Group Holding Ltd's finance affiliates have joined the group seeking to buy out Momo Inc, sparking a record rally in the Chinese dating app maker's stock.

Momo surged 33 per cent to US$15.96 at 11:42 am in New York, the biggest gain since its Dec 2014 initial public offering in the US. Trading volume of 11.3 million shares was more than seven times the full-day average of the past three months.

The American depositary receipts rallied after a regulatory filing showed that Alibaba affiliates are backing a buyout of Momo that chairman and chief executive Yan Tang proposed last June, just six months after raising US$248 million in the IPO. The ADRs had slumped to a record low in February as speculation mounted that the deal wouldn't go through.

"Today's announcement renewed hopes of Momo's privatization," Henry Guo, a San Francisco-based analyst at Investment Technology Group, said by phone.

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Market voices on:

"With Alibaba on board it shows that money is no longer a problem."

Only seven of 40 US-traded Chinese companies that have proposed delistings from American exchanges in the past 12 months have completed the process as a volatile mainland stock market and the economic slowdown in China have reduced the attractiveness of a local listing.

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