NEW YORK, March 28 (Xinhua) -- Shares of Qutoutiao extended solid gains in Thursday's morning sessions, after the Chinese mobile content platform announced a convertible loan of 171 million U.S. dollars from China's e-commerce giant Alibaba.
Before market open, Qutoutiao announced the investment from Alibaba Investment Limited, an affiliate of Alibaba Group, pushing its stock price up over 10 percent once in premarket trade.
The convertible loan will be convertible into Class A ordinary shares of Qutoutiao at Alibaba's option at a conversion price of 60 dollars per share, equivalent to 15 dollars per American deposit share (ADS), the company said in a statement.
An ADS is a U.S. dollar-denominated equity share of a foreign-based company for purchase on a U.S. stock exchange.
With an interest rate of 3 percent per year, the loan will mature in three years, unless previously repaid or converted in accordance with their terms prior to such date.
Once fully converted, the mobile content provider will issue new shares to Alibaba, representing approximately 4 percent of its share capital.
Shares of Qutoutiao and Alibaba increased nearly 0.7 percent and over 0.6 percent respectively as of 10:33 a.m. EST (1433 GMT).
Launched in June 2016, Qutoutiao, or "fun headlines" in Chinese, provides fun and entertainment-oriented articles, short videos and customized feeds to users, driven by artificial intelligence-based algorithms.
The company issued its initial public offering on the Nasdaq on Sep. 14, 2018, under the ticker symbol QTT.
It has been one of the largest mobile content aggregators in China in terms of monthly average users and daily average users, many of which are from lower-tier cities in China, according to the company.