Is the tea bubble bursting? ChaPanda shares plunge in Hong Kong IPO
CNN
Shares in Chinese bubble tea chain Sichuan Baicha Baidao failed to pop during their market debut Tuesday, tumbling as much as 38% from their listing price.
Shares in Chinese bubble tea chain Sichuan Baicha Baidao failed to pop during their market debut Tuesday, tumbling as much as 38% from their listing price. The company, also known as Chabaidao or ChaPanda, had priced its shares at $17.50 Hong Kong dollars ($2.23) apiece, but they plunged as low as $10.80 Hong Kong dollars ($1.38) in the first two hours of trading on the Hong Kong stock exchange. ChaPanda’s shares closed nearly 27% down at $12.80 Hong Kong dollars ($1.63). The company is China’s third-largest retailer of freshly made tea drinks, it said in its IPO prospectus, citing data from market research consultancy Frost & Sullivan. It operates mainly via franchises and has established a network of more than 8,000 stores since opening its first in Chengdu, Sichuan, in 2008. It said it intended to use the money raised from the listing to strengthen its supply chain and digitize its operations, among other plans. Bubble tea (also called “black pearl tea” or “boba tea”) originated in Taiwan in the 1980s, but has since found millions of devotees around the world. Though there are dozens of variations, the essential ingredients are tea, milk and bubbles — little balls made of anything from tapioca to fruit jelly.
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