Kuaishou-W's stock surged 5.33% in pre-market trading on Thursday, as investor optimism was fueled by the company's confirmed plans to spin off its high-growth Kling AI video generation business.
The sharp rise follows Kuaishou's announcement that its board is evaluating a proposed restructuring of Kling AI-related assets and business, which may involve external financing. According to market reports, Kuaishou is seeking a $20 billion valuation for Kling AI in a pre-IPO funding round, targeting approximately $2 billion in fundraising. The AI unit's annualized recurring revenue reportedly reached $500 million by late April, significantly exceeding the $300 million guidance provided earlier this year.
Analysts view the potential spinoff as a strategic move to unlock the value of Kling AI, which could allow for an independent valuation of the high-growth asset while potentially relieving Kuaishou's substantial capital expenditure burden. The market is responding positively to the prospect of value realization from Kuaishou's AI investments.
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