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Why Bilibili Stock Rose Today

By Evan Niu, CFA - Apr 9, 2020 at 1:51PM

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The Chinese online entertainment platform scored a major investment from an industry titan.

What happened

Shares of Bilibili (BILI 4.45%) have risen today, up by 2% as of 12:40 p.m. EDT, after the company announced that Sony (SONY -0.11%) had invested $400 million in the Chinese online entertainment platform. The stock had gained as much as 14% in early trading to tap fresh all-time highs before starting to pull back.

So what

Bilibili said that the Japanese tech conglomerate has agreed to purchase 17.3 million newly issued Class Z shares for $400 million in cash at a price of approximately $23.11 per share, which is equivalent to the same price per American depository share (ADS). The deal is expected to close tomorrow, which will give Sony a roughly 5% stake in Bilibili.

People shaking hands

Image source: Getty Images.

Once the transaction is finalized, Bilibili and Sony will begin collaborating on strategic entertainment opportunities for the Chinese market, including anime and mobile games.

Now what

"We are excited to partner with Sony, the world's leader in entertainment and technology," Bilibili CEO Rui Chen said in a statement. "The strategic investment and business cooperation further align our goals to bring best-in-class content offerings and services to our users, as we increase our domestic stronghold in animation and mobile games."

The investment will help beef up Bilibili's balance sheet, which had $1.16 billion in cash and cash equivalents at the end of 2019. The company has been enjoying strong growth, with mobile monthly active users (MAUs) jumping 46% to 116.1 million in the fourth quarter.

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Stocks Mentioned

Bilibili Stock Quote
$26.74 (4.45%) $1.14
Sony Corporation Stock Quote
Sony Corporation
$81.68 (-0.11%) $0.09

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