Chinese Social Network YY Rises in U.S. Stock Market Debut
The stock of Chinese social media network YY rose 7.7 percent in its U.S. stock market debut Wednesday, just ahead of the Thanksgiving weekend.
The IPO was the first for a Chinese company in the U.S. in eight months amid a recent slowdown in stock listings from the country.
YY is a video-based social network with more than 300 million users. It originally focused on video gamers, but then broadened its business to provide group voice and video sessions focused on music, fashion, sports and other topics. The company says it can offer voice and video interactions for groups with as many as 1 million people.
YY uses virtual roses as a virtual currency that users can earn via music performances or created videos. For example, users can buy and give virtual roses to singers or instructors they like on the network, and the recipients can cash in the virtual currency for real money. Forbes earlier this year reported that top performers on YY can earn more than $20,000 a month.
YY had priced its stock at $10.50, the bottom of its proposed price range. It closed Wednesday at $11.31 after going as high as $11.75, giving the company a market value of $11.1 billion, compared with Facebook's nearly $53 billion. The YY IPO raised $81.9 million.
Bloomberg News said that YY is only the third Chinese company to complete a U.S. IPO in 2012. That is down from 13 in 2011 and 38 in 2010. It said that allegations against U.S.-listed companies from China over accounting irregularities and misrepresentations have deterred companies from seeking IPOs.