"It bodes well actually for all the Chinese internet players."
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A sign advertising the Qihoo 360 Technology Co Ltd is hung outside of the New York Stock Exchange before the company's Initial Public Offering (IPO) in New York on Wednesday, March 30, 2011. [Photo: yesky]
Qihoo 360 Technology Co Ltd, China's third most-popular internet company, saw its share price more than double in its debut on the New York Stock Exchange (NYSE) on Wednesday.
The company's stock opened at 27 US dollars a share on the NYSE, up 86% from its initial public offering price of $14.50, and finally ended the session at $34.00, soaring 134.48 percent.
The listing of Qihoo 360 came on the heels of a rush of similar Chinese companies in late 2010, including online video company Youku.com and internet retailer Dangdang.com.
The concept stocks of China's Internet enterprises have been applauded by foreign investors since the first round of hot listing began in 2000, and the year 2010 saw its fourth listing upsurge.
Gu Wei, columnist of Reuters Breakingviews, explained the reason why Chinese internet companies prefer to list overseas rather than on the domestic stock exchanges.
"It makes sense to list there because they have better comparisons and investor bases there, and also analysts are more knowledgeable about tech companies there."
Following the step of Qihoo 360, China's popular social network Renren.com is planning for an IPO soon.
Gu said self-confidence and enough preparation are essential for Chinese companies, no matter big or small, to reach the top league.
"There is divergence among Chinese companies listed in New York, either you have the really popular ones like Baidu, or the smaller ones that have just been forgotten and unloved there," Gu said, "If you want to go for the top league and list in New York, you'd better be prepared and have confidence that you are going to be a star there."
So far this year, Chinese IPOs have seen little traction as the shares of the companies that listed in New York have dropped below their offer prices. However, Qihoo 360 came out and priced its shares about $2 above the proposed range.
The profit model of Qihoo 360, as expert Gu Wei said, brings a good omen to Chinese internet companies.
"As for the other companies, I don't think they should be too worried about it. Qihoo is only raising less than $200 million. That's a roughly small amount," she said, "I think it bodes well actually for all the Chinese internet players."
