China’s other internet IPO
The Chinese internet IPO you haven’t been waiting for is finally here. JD.com, whichBloomberg Businessweek’s Bruce Einhorn calls “the closest thing to a Chinese version of Amazon.com”, 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. JD.com’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. JD.com’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 JD.com – as well as its sheer range of businesses.
The WSJ’s Michelle Yuan thinks JD.com’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: