China.com Rockets 300 Percent On IPO
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The company sold 4.2 million shares at $20 raising $80.2 million. By midday, the stock rose to 60-15/16 and closed at 67 7/64 at the end of Tuesday's trading with a trading volume of 13,371,000.
Analyst say that the major reason for China.com Corp's success is the stake that AOL has in the company. Wall Street sees this as AOL's bid to enter the China market.
The other prominent shareholders include Hong Kong infrastructure giant New World Infrastructure (18.2 percent), China's government-run news agency Xinhua (13.6 percent), U.S. Internet advertising firm 24/7 Media Inc. (10.9 percent), one of the world's largest CD-ROM manufacturers, Taiwan's CMC Magnetics (4.4 percent).
Many investors rushed to get into China.com shares in expectation that it would be another StarMedia Network Inc.(Nasdaq:STRM), a Web site operator in the Latin American market that had a successful debut in May, but the Asian stock did better and outperformed these expectations.
In the lead up to China.com's IPO, the company's performance in the Chinese space came under fire in the Asian and US media including such publications as Newsweek, CNN, the Wall Street Journal, the New York Times, and the China Matrix.
However, most analysts expected China.com to do well in its initial offering because of the potential of the China market and AOL's interest in the portal operator.