LightInTheBox Holding Co. (LITB), a Chinese online retailer, surged 20 percent in New York after saying it bought Seattle-based Ador Inc., a website that sells clothes and accessories similar to those worn by celebrities from Beyonce Knowles to Taylor Swift.
American depositary receipts of the Beijing-based company jumped the most in seven months, with trading volume four times the 90-day average. The Bloomberg China-US Equity Index of the most traded Chinese stocks in the U.S. dropped 0.8 percent to 102.25 yesterday as a private gauge of China’s service industries spurred concern that economic growth is slowing. Semiconductor Manufacturing International Corp. (SMI) fell, trading at the widest discount to its Hong Kong shares in three weeks.
LightInTheBox, which sells everything from $80 wedding gowns to $2 iPhone gadgets, will have its first office in the U.S. following the acquisition, it said in a statement yesterday. Ador collects images of celebrities online and directs users who are looking to shop for similar styles. Short interest in LightInTheBox has risen to 12 percent of outstanding shares, from a low of 10.2 percent in October, according to Markit, a London-based research firm.
“The market may interpret it as a path for growth for LightInTheBox,” Josef Schuster, the founder of IPOX Schuster LLC in Chicago, a research firm focusing on initial public offerings, said by phone yesterday. “That may have triggered short sellers to cover their short positions, driving up the stock price.”
In a short sale, an investor borrows a security and sells it, expecting to profit from a decline by buying it back at a lower price.
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., slipped 1.8 percent to $36.01 in New York, after retreating 4 percent last week. The Standard & Poor’s 500 Index dropped 0.3 percent after a report showed weakness in the services industry.
LightInTheBox jumped to $9.81, the highest since Nov. 18. The rally helped erase a loss since the company’s June IPO. The stock slumped 15 percent last year, the only decline among eight Chinese companies that completed their U.S. IPOs in 2013.
The company, which surged 22 percent on its debut trading June 6, tumbled 40 percent on Aug. 20 and sank 23 percent on Nov. 19 after providing quarterly sales forecasts that missed analysts’ average estimates.
The deal with Ador involved an “undisclosed amount of cash,” LightInTheBox said in the statement. Ador’s employees will join LightInTheBox and will represent the company in the U.S., an important growth market, it said. The move underscores LightInTheBox’s commitment to building a global e-commerce company, according to the statement, which cited Chairman and Chief Executive Officer Alan Guo.
Guangshen Railway Co., which runs the only train line linking mainland China to Hong Kong, sank as railway stocks fell in Shanghai and Hong Kong trading after China Railway Group Ltd. said in a Jan. 5 regulatory filing its president died in an accident.
Guangshen’s ADRs tumbled 5.9 percent to $21.97 in New York, retreating the most since June. Volume was four times the 90-day average compiled by Bloomberg.
Semiconductor Manufacturing, a Shanghai-based chipmaker, slumped 3.8 percent to $3.82, the biggest decline in three weeks. Its ADRs, each representing 50 underlying shares in the company, traded 2.9 percent below its stock in Hong Kong, the largest discount since Dec. 11.
E-Commerce China Dangdang Inc. (DANG), the nation’s biggest online book retailer, dropped 4.5 percent to a three-week low of $9.
Youku Tudou Inc. (YOKU), owner of China’s biggest video websites, jumped 7.7 percent to $33.92, the highest price since August 2011.
The Hang Seng China Enterprises Index in Hong Kong fell 0.7 percent to 10,220.46, its lowest level since Oct. 25, at 10:14 a.m. today. The Shanghai Composite Index (SHCOMP) slid 0.4 percent to 2,037.87, poised for its lowest close in five months.
China’s services purchasing managers’ index decreased to 50.9 in December from 52.5 the previous month, according to HSBC Holdings Plc and Markit Economics Ltd. yesterday. A reading above 50 represents an expansion.
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