NEW YORK – Shares of Youku.com Inc. tripled in their first day of trading on the New York Stock Exchange, putting the Chinese online television company's initial public offering on a pace to be the biggest first-day gainer of the year.
The stock jumped about $24 to $36 in midday trading Wednesday after pricing at $12.80 per American Depositary Share.
If the price stays at the current level or higher, Youku would eclipse ChinaCache International's Oct. 1 IPO, which priced at $13.90 and closed at $27.15 for a gain of 95 percent.
Youku's initial offering of 15.8 million ADSs was predicted to price between $9 and $11 apiece, with each ADS representing 18 Class A shares. An ADS enables investors to buy stock in foreign companies on U.S. exchanges. At $12.80 per ADS, the IPO raised $202.8 million in gross proceeds.
"This step will position Youku for future development and growth to be the primary video content provider for Chinese Internet users across all Internet-enabled devices," Youku.com founder and CEO Victor Koo said in a statement.
John Fitzgibbon, founder of IPOScoop, said he's surprised the stock isn't trading even higher, considering the hype prior to its NYSE debut.
"People are looking at it as China's Netflix," he explained.
Youku previously said that it plans to use about $30 million of the proceeds for technology, infrastructure and product development efforts. Another $25 million will be used for video content acquisition, and approximately $20 million will be used to expand sales and marketing efforts.
The company said remaining funds would be put toward general corporate purposes, such as working capital and possible acquisitions.
Youku, which trades under the "YOKU" ticker, had revenue of 153.6 million renminbi ($204.1 million) for the year ended Dec. 31, 2009.
news.yahoo.com |
