Shares of Dangdang and Youku debut in New York
December 23, 2010 Category Uncategorized
The shares of both Dangdang and Youku.com were priced above indicative ranges for initial public offerings (IPOs) in the United States as investors showed a strong appetite for Chinese internet companies. Dangdang sold 17 million shares on the New York exchange, raising USD272 million, 33% more than originally planned. Youku.com, China’s top online video-sharing website, raised USD203 million after planning to generate USD169 million. IT industry experts said whether Chinese internet firms will succeed depends on the steps they take to deal with intellectual property rights (IPRs) and developing unique competitiveness. China Dangdang, which operates the Dangdang.com website, reported a 56% increase in sales in the first nine months of 2010 from the same period a year ago. Last year, Youku.com reported a loss of USD26.7 million. Its losses have been dropping in recent years due to lower operation costs. Youku’s debut capped the biggest one-day advance in five years, while Dangdang’s shares almost doubled on their debut. Youku surged 161% to USD33.44, second only to the record set by Baidu.com, which soared 353% when it was first traded in August 2005. With the share surge Youku is now worth USD3.43 billion, exceeding the USD2.88 billion market value of Sohu. Dangdang’s shares jumped 87% to close at USD29.91. “The shares may remain strong for several weeks on speculation,” Joseph Greco, a trader on the New York Exchange said. “They will gradually fall after the initial surge.”
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