Shanda Games a winner, year's biggest U.S. IPO 2009-09-26 13:11:06   Print

    by Xinhua writer Yang Lei

    NEW YORK, Sept. 25 (Xinhua) -- Chinese online video games operator Shanda Games debuted on Nasdaq Friday and became the largest initial public offering (IPO) in the U.S. market this year at a whopping 1 billion U.S. dollars.

    Shanda Games, whose IPO price was at the top of its expected range of 10.50 to 12.50 dollars per American depositary share, fell 1.75 dollars to close at 10.75 dollars a share on Friday. Allmajor indexes in the New York stock market retreated on lackluster economic data.

    Shanda Games has sold 83.5 million shares in total, nearly one third more than originally planned. By raising 1.04 billion dollars, Shanda Games has become the largest U.S.-listed IPO since April 2008.

    "We are very happy to welcome Shanda Games," Robert McCooey, senior vice president of New Listings and Capital Markets of the NASDAQ OMX Group, told Xinhua. "This is the largest single listing on Nasdaq of (any) Chinese company ever."

    Shanda Games was spun off from Nasdaq-listed Shanda Interactive Entertainment, which claimed to be China's largest operator of online games with nearly 10 million active accounts. The company hosts so-called MMORPGs, or massively multi-player online role-playing games, under which users pay monthly subscriber fees as well as purchase items within the game.

    Shanda saw its revenue and profits growing swiftly in the first half of this year. Its net revenue increased 43 percent to 322 million dollars, and net income jumped 75 percent to 98 million dollars, compared to the same period in 2008.

    "In a tough trading market today they are down a little bit, but we still think the company has tremendous prospects," McCooey said.

    Shanda Games is the second Chinese IPO in the United States this year. In April, another Chinese online game company raised 120 million dollars in a similar IPO. Changyourallied 25 percent on the first day of trading at Nasdaq and has risen to as high as 48.37 dollars a share. The stock closed at 37.23 dollars on Friday, 133 percent up from its IPO price and the best-performing IPO across the U.S. market by far this year.

    "I think what we saw was that we had a great IPO in April, which was the open-table IPO (for Nasdaq), small deal, but (it) really reinvigorated the market. It was venture-backed, had all the characteristics of a typical Nasdaq company, very entrepreneur, very innovative," McCooey exclaimed. "And because that company was able to be so successful with the IPO, it reopened the window for companies to come to the market."

    U.S.-listed Chinese online gaming companies have become attractive to investors as most of them have outperformed major indicators this year. As China has the largest population of internet users in the world, analysts believe the market has great potential.

    "We still see it a tremendous market for China, not only for the online gaming business," McCooey said. "It is our largest single market, and continues to grow."

    McCooey added that Nasdaq has been in touch with a number of Chinese companies who are excited about going public in foreign markets. "We expected there will be more listings from China on Nasdaq before the end of this year," he predicted.

Special Report:  Global Financial Crisis

Editor: Li Xianzhi
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