Shares of Momo briefly jumped more than 4.5 percent in Thursday morning trade. Earlier, the stock fell more than 5 percent in pre-market trade after the mobile-based Chinese social networking platform said a potential buyout group has withdrawn its offer.
The stock ended the day up more than 2 percent.
The privatization group included Momo's co-founder, chairman and chief executive officer Yan Tang and Alibaba Investment, a subsidiary of Alibaba Group. Other members were Matrix Partners China II Hong Kong, Sequoia Capital China Investment Management, Rich Moon and Huatai Ruilian, according to a Thursday release.
"With the privatization proposal from the Buyer Group behind us, we are more committed than ever to driving business growth in the interest of the Company and our shareholders," Tang said in the release.
On Tuesday, the firm reported a year-over-year decline of nearly 4.6 percent in monthly active users to 74.8 million in June 2016. Net revenue rose 222 percent from the same period last year to $99.0 million.
For the third quarter of 2016, Momo said Thursday it expects net revenues to be between $125 million and $130 million, representing a year-over-year increase of 234 percent to 247 percent.
The withdrawn buyout proposal was originally dated June 2015 and followed a trend of the last few years of U.S.-listed Chinese firms wanting to privatize and re-list on mainland Chinese exchanges.
Momo filed for an initial public offering on the Nasdaq in late 2014. Shares are down 2.75 percent year-to-date but up more than 50 percent for the quarter so far.
Morgan Stanley was one of the IPO underwriters and is one of the largest institutional investors in the stock with a 2.4 percent stake in shares outstanding, according to FactSet. Alibaba has a holding of half a percent of outstanding shares.