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RealTime IT News

Tom.com IPO Spurs Chaos in Hong Kong

Hong Kong tycoon Li Ka-shing's Internet company Tom.com Ltd has received about 1.5 million applications to buy the shares, an record-breaking oversubscription.

Five hundred police officers were called in to keep order in banks where application forms for the IPO were being collected.

According to the Hong Kong police, there were about 300,000 people queuing up before the application deadline at noon Wednesday.

Shops near the banks had to shut their doors as roads outside HSBC branches in Kwun Tong and Mongkok were sealed off. In other districts, the queues stretched for several blocks.

The IPO represents about HK$11.42 billion (US$1.47 billion) in would-be investors' money. Experts predict that one in five applicants will be eligible to purchase the shares.

The Chinese-language Apple Daily estimates that the share price will jump considerably after Tom.com shares start trading on the Growth Enterprise Market (GEM) Board next Wednesday.

Most of the would-be investors of Tom.com are tempted by the Li family's magic business touch rather than the Internet business.

The South China Morning Post reported that one middle-aged man queuing outside the Mongkok branch summed up the crowd's optimism in the shares' prospects when he said, "it is better to wait here for a day than to work for a year."

However, Carl Cheung, CEO of Tom.com, said due to the high risk of buying GEM Board shares, the company has only placed 10 percent of its shares for the IPO.

He said he was surprised by the IPO's enormous popularity.

Tom.com, a bilingual China-related vertical portal, launched last month and has no revenue record as yet.