Tudou plunges in first-day trading
Source: Bloomberg News |
August 18, 2011, Thursday
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Print Edition
Print Edition
TUDOU Holdings Ltd, China's second-biggest video website, yesterday tumbled as much as 19 percent in its first day of trading after raising US$174 million in a United States initial public offering, selling at a discount to larger rival Youku.com Inc.
The Shanghai-based company's American depositary receipts fell 6.6 percent to US$27.10 in New York morning trading after touching US$23.50 and opening below the offering price.
Tudou sold 6 million ADRs at US$29 apiece, according to a statement. Tudou had offered the ADRs for US$28 to US$30 each, according to a regulatory filing.
Tudou priced its shares at a 58 percent discount to larger Youku.com Inc after a rout in equities this month shrank investor appetite for new stock. The IPO also follows a report last week that Baidu Inc, China's biggest Internet search site, had approached the video provider about a takeover.
The IPO price values Tudou at US$822 million, or about one-third the size of Youku.com, which has a market value of US$2.7 billion.
It also values Tudou at about 16 times sales in the 12 months through March 31. At the close of trading on Tuesday on the New York Stock Exchange, Youku.com traded at 37 times sales for the same period.
Tudou's IPO proceeds will be used for technology upgrades, bandwidth expansion and rights to videos as it vies for visitors in the world's biggest online market. The site offers movies, TV series and content it produces itself, as well as user-generated videos such as are found on Google Inc's YouTube.
The company accounted for 14 percent of online-video advertising revenue in China at the end of the second quarter, compared with 17 percent at the end of 2010, while Youku gained 2 percentage points to 23 percent, according to Analysys International.
The Shanghai-based company's American depositary receipts fell 6.6 percent to US$27.10 in New York morning trading after touching US$23.50 and opening below the offering price.
Tudou sold 6 million ADRs at US$29 apiece, according to a statement. Tudou had offered the ADRs for US$28 to US$30 each, according to a regulatory filing.
Tudou priced its shares at a 58 percent discount to larger Youku.com Inc after a rout in equities this month shrank investor appetite for new stock. The IPO also follows a report last week that Baidu Inc, China's biggest Internet search site, had approached the video provider about a takeover.
The IPO price values Tudou at US$822 million, or about one-third the size of Youku.com, which has a market value of US$2.7 billion.
It also values Tudou at about 16 times sales in the 12 months through March 31. At the close of trading on Tuesday on the New York Stock Exchange, Youku.com traded at 37 times sales for the same period.
Tudou's IPO proceeds will be used for technology upgrades, bandwidth expansion and rights to videos as it vies for visitors in the world's biggest online market. The site offers movies, TV series and content it produces itself, as well as user-generated videos such as are found on Google Inc's YouTube.
The company accounted for 14 percent of online-video advertising revenue in China at the end of the second quarter, compared with 17 percent at the end of 2010, while Youku gained 2 percentage points to 23 percent, according to Analysys International.
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