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Changyou scores on market debut

ONLINE video game-maker Ltd closed 25 percent higher after jumping over 50 percent in its trading debut yesterday in Nasdaq.

It was only the third initial public offering in the United States since August 2008, and the largest Chinese IPO on a US exchange since December 2007.

The spin-off from the Internet portal Sohu rose 25 percent, or US$4.02, to close at US$20.02 on Nasdaq.

The company raised US$120 million by selling 7.5 million American Depository Shares at US$16 per share.

Changyou runs the online, role-playing martial-arts game "Tian Long Ba Bu". The game, launched in May 2007, generated revenue of US$188.9 million in 2008, making up more than 44 percent of Sohu's total revenue.

Changyou Chairman Charles Zhang said the strong debut was due to the deal's pricing as well as the track record of Sohu, which has been listed on Nasdaq for nine years.

"This will give Changyou more focus on its online game business. Sohu will focus on monetizing our business with online advertising, search advertising and videos and might even charge for content," CEO and chairman of Sohu Charles Zhang said in an interview in New York.

"Domestic hi-tech companies had to go to overseas stock markets before the Growth Enterprise Market was set up but now the situation is different. The spin-off of Changyou from Sohu will provide experience for these enterprises," Wang Yuquan, an analyst at Dongxing Securities said.

Sohu filed the registration statement of its subsidiary on March 17 and the estimate offering price was set at US$14-US$16. Sohu will retain a 71 percent stake in Changyou after the sale.

Sohu however dropped 3.37 percent to US$42.16 on the same trading day.


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