China Online Video Site Youku Debuts on NYSE
Raises $203 Million in IPO and has biggest market opening for new U.S. issue in five years
HONG KONG -- Youku, one of China’s leading online video sharing websites, has raised about $203 million in its initial public offering on the New York Stock Exchange, well above the expectations of its underwriter, Goldman Sachs. And the stock rose sharply in its market debut Wednesday.
Shares of the Beijing-based company that purports to be China’s leading YouTube clone started NYSE trading after the initial pricing saw Goldman able to float 15.8 million Youku shares for $12.80 each, more than the 15.4 million shares it had planned to sell at $10 per share. The stock rose 161% to $33.44. Bloomberg said that made its the biggest gain for a U.S. IPO in five years.
The Youku IPO raises the bar for the imminent Nasdaq listing of its closest Chinese competitor, Tudou.
Tudou has filed for a Nasdaq IPO hoping to raise up to $120 million.
Because the costs of content and bandwidth are rising, both companies are losing money but both also are betting that U.S. investors will view pent-up demand for entertainment in China’s growing middle class as a recipe for long-term success. China's online population of 420 million surpasses the entire population of the United States.
Youku's revenue grew to 234.6 million yuan ($35.3 million) in the first nine months of 2010, up 135% from the same period in 2009.
Its net loss, however, widened by 22.5% to 167 million yuan.
-- Reuters contributed to this report