Kingsoft Cloud priced its upsized Nasdaq IPO on May 8, 2020. Contemporary coverage put the deal at about $510 million; the company later reported selling 34.5 million American depositary shares (ADSs) at $17 each and receiving approximately $551.3 million in net proceeds after the full overallotment. Luckin Coffee was part of the market backdrop, not a demonstrated connection to Kingsoft Cloud.
What Kingsoft Cloud raised in its IPO
On May 8, 2020, Kingsoft Corporation announced that Kingsoft Cloud had priced its ADS offering and begun trading on Nasdaq. Data Center Knowledge, carrying Bloomberg coverage that day, described the upsized IPO as raising about $510 million. That is the contemporary reported deal figure, not the later net-proceeds amount.
In a June 3, 2020, results announcement, Kingsoft Cloud reported the completed sale of 34.5 million ADSs at $17 per ADS. The total included the underwriters’ full exercise of an option to purchase 4.5 million additional ADSs. The company said net proceeds were approximately $551.3 million after underwriting discounts and commissions. These figures describe different measures and stages of the offering; the company’s release does not present the $551.3 million as the same gross deal-size figure reported contemporaneously.
How the offering was enlarged
Caixin Global reported on May 5, 2020, that Kingsoft Cloud had raised its fundraising target from an original $100 million target. The final reported sale included the full 4.5 million ADS overallotment, taking the total to 34.5 million ADSs. The SEC registration amendment filed May 4 contains the formal offer terms and shareholder information.
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Caixin also reported that existing shareholders Xiaomi and Kingsoft indicated interest in purchasing up to $50 million and $25 million, respectively, at the IPO price. These were stated indications of interest; the cited coverage does not establish that those maximum amounts were ultimately allocated or purchased.
Why the IPO was framed against Luckin Coffee
Luckin Coffee’s accounting scandal had become a prominent concern for investors in Chinese companies listed in the United States. Bloomberg-sourced coverage described Kingsoft Cloud as the first Chinese company to list in the U.S. after the Luckin scandal became a major market issue. The timing made investor confidence and scrutiny of Chinese issuers relevant context for the offering.
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That juxtaposition does not establish a business relationship between Kingsoft Cloud and Luckin, or suggest that Kingsoft Cloud was implicated in Luckin’s conduct. The SEC’s December 16, 2020, complaint concerning Luckin describes regulatory allegations and the company’s disclosure of an internal investigation. Those allegations belong to Luckin’s separate case and should not be attributed to Kingsoft Cloud.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What Kingsoft Cloud was in 2020
Kingsoft Cloud was a cloud-services provider. The May 8, 2020, Bloomberg-sourced report characterized it as China’s third-largest cloud-services provider by revenue and cited a 5.4% revenue market share from a company filing. Those are historical, attributed estimates—not a current ranking or market-share figure.
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Sources for the deal and its context
- Kingsoft Corporation’s May 8, 2020, announcement on pricing and Nasdaq trading.
- Data Center Knowledge’s May 8, 2020, coverage, carrying Bloomberg reporting on the reported $510 million deal and Luckin backdrop.
- Kingsoft Cloud’s Form F-1/A, filed May 4, 2020, for registration-statement terms and company information.
- Kingsoft Cloud’s June 3, 2020, first-quarter results release, which reported the completed ADS sale and net proceeds.
- Caixin Global’s May 5, 2020, report on the enlarged target and shareholder purchase indications.
- Luckin Coffee’s May 19, 2020, SEC filing for a contemporaneous company filing record.
- The SEC’s December 16, 2020, complaint concerning Luckin Coffee for primary-source regulatory allegations and disclosure context.
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