Rockets 300 Percent On IPO

Despite recent criticism in the press regarding its business performance, Chinese Web portal operator Corp. [Nasdaq: CHINA] soared 300 percent over its initial pricing on the Nasdaq.

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. owns and operates three portals in the Greater China space,,, and as well as ventures with 24/7 Media in Asia and America Online (AOL) in Hong Kong.

Analyst say that the major reason for 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.

Before the share offering, AOL had a 10 percent stake in (8 percent after IPO) with option to buy an additional 15 percent at the initial share offering price on a fully diluted basis. According to the company’s prospectus, AOL can exercise this in two allotments, 8.5 percent after 15 months and 6.5 percent after 24 months.

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 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’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 to do well in its initial offering because of the potential of the China market and AOL’s interest in the portal operator.

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