By The Associated Press
NEW YORK (AP) — Shares of E-Commerce China Dangdang Inc. soared in their initial public offering Wednesday, after pricing above the high-end of the online retailer’s expected range.
Shares of the Beijing company rose $10.65, or 66 percent, to $26.65 during Wednesday afternoon trading.
The operator of Dangdang.com, which is comparable to Amazon.com in the U.S., priced 17 million American Depositary Shares at $16 apiece, above the expected range of $13 to $15 per share. It trades under the ticker symbol “DANG.”
The company expects to net up to $172.5 million if underwriters choose to buy additional shares, and says it will use the money for general corporate purposes, including potential acquisitions, and to broaden its product categories.
It’s no surprise that U.S. investors would feel confident about buying stock in a company comparable to Amazon, said Scott Sweet, senior managing partner of analysis firm IPOBoutique. After all, he said, Amazon’s stock is near a 52-week high and it wasn’t even as evolved a company when it went public in 1997. For instance, it had not yet expanded its product offerings to sell shoes and home appliances, among other items.
“China Dangdang is further along in their infancy and more like Amazon now than Amazon was in the first few years,” he said.
E-Commerce’s debut comes at a time when 35 percent of IPOs since September are by Chinese companies, according to Renaissance Capital, an IPO research and investment fund. Chinese IPOs have had an average return of 30 percent, while IPOs overall have returned about 19 percent.
On Wednesday, Youku.com, China’s leading video portal, debuted alongside E-Commerce. Just as E-Commerce’s site dangdang.com is comparable to Amazon, Youku is something of a mash-up between online video websites Hulu and YouTube, as it offers both user-generated video as well as TV shows and sporting events.
Youku’s shares were priced at $12.80 but more than doubled to $32.80 in afternoon trading. Youku trades under the ticker symbol “YOKU.”