Chinese Grocery Delivery Company Dingdong Closed 2 cents Higher in US IPO

Dingdong closed 2 cents higher in its U.S. IPO Tuesday, following a 70% cut in the offering size. The lackluster performance comes amid a surge in Chinese stock listings in the U.S. and concerns about growth in the grocery delivery industry, in which tech giants Alibaba, Meituan and JD.com have all invested significantly.

In its initial public offering, Dingdong gained a market value of $5.5 billion. That is more than double the value of Tencent-backed rival Missfresh, which fell more than 25% in its Nasdaq debut Friday.Earlier this week, Dingdong disclosed it would price its IPO on the New York Stock Exchange at $23.50 a share, on the low end of the proposed range and with fewer than 30% of the initial number of shares. Dingdong raised $95.69 million as a result, versus an offering that could have been as large as $357 million.

Founder and CEO Liang Changlin said that he planned to use the IPO proceeds for expanding the company in China, and investing in technology and talent. He said that they have just finished a Series D round of funding, and everyone knows we raised 1.03 billion dollars. From their perspective, the IPO itself is a milestone and how much money we raised isn’t that essential. We have adequate cash flow and that is our situation.

Liang has a 30% stake in the company. The Chinese Grocery Delivery company said in its prospectus it had $226.56 million in cash, cash equivalents and restricted cash. Together with anticipated cash flows from financing activities, the company said it expected to meet its financial needs for at least 12 months.