China’s other internet IPO

May 22, 2014

The Chinese internet IPO you haven’t been waiting for is finally here., whichBloomberg Businessweek’s Bruce Einhorn calls “the closest thing to a Chinese version of”, priced its $1.8 billion offering at $19 a share, above the initial $16 to $18 range. It opened today on the NASDAQ at $21.75 and gained 10% in its first day of trading, valuing the company at approximately $30 billion.

Above-range pricing plus a nice opening day pop is as good a way as any to please both those selling stock in the IPO and those buying it.’s selling shareholdersinclude the company’s founder and CEO Richard Liu, Chase Coleman’s Tiger Global (best known for 45% returns in 2011), and Yuri Milner’s DST (an early investor in Facebook who helped Goldman Sachs to become a later investor in Facebook).

Interestingly, Alibaba is also probably pretty happy with the reception for one of its main ecommerce competitors.’s IPO, says Reuters David Gaffen, is seen as a precursor to Alibaba’s offering. The latter is a much, much larger compnay, both in terms of ecommerce – with 47 times the gross merchandise value of – as well as its sheer range of businesses.

The WSJ’s Michelle Yuan thinks’s successful-so-far listing could help Chinese tech stocks more broadly, if only by improving their vibes. (Which as methods for predicting short-term stock movements go is about as good as anything.) If you are looking for best-in-class governance, it’s better to look elsewhere, says DealBook’s Robyn Mak: the company revealed on Monday that it gave Liu $591 million in amusingly euphemistic “immediately vesting restricted stock units” (aka “stock he can sell immediately”).

What the company does offer, writes Quartz’s Gwynn Guilford, is a sort of Chinese online retail moonshot: a chance to convert inland provinces, which have 125 cities with a million plus residents, to ecommerce. The company, Guildford says, is going to spend more than a billion dollars of its newly raised capital on delivery infrastructure. That may please investors, but it won’t produce as immediate returns as the company’s first day of trading. — Ben Walsh

On to today’s links:

Must Reads
The case for reparations – Ta-Nehisi Coates

Old Normal
The racist history of Chicago’s housing policies – The Atlantic

A great rent vs. buy calculator – The Upshot
“In New York, SF and LA, buying a home again looks like a perilous investment” – Neil Irwin

Maybe we overestimate what the government can do about inequality – Chris Dillow

On Language
Mumpsimus and 15 other weird old words that should make a comeback – Mental Floss

Awful But Informative
Facebook’s Director of Insignificant Viral Content dismayed by the prevalence of insignificant viral content – Mike Hudack

Mail Online is a revenue juggernaut – The Guardian

“The biggest failure was… leaving families struggling with mortgages they can’t afford” –The Atlantic

In defense of trigger warnings – NY Mag

Good Questions
How did we get so busy? (A few days old, but you know, we’ve been busy…) – NYer

Tim Geithner has some rather, um, eccentric ideas about FDR – Matt O’Brien
Geithner doesn’t get what caused the Great Recession – Mike Konczal

So Hot Right Now
The new subprime is good old-fashioned loan sharking – Bloomberg

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