Oct. 31 (Bloomberg) -- 58.Com Inc., a Craigslist-like Chinese online marketplace, jumped on its first day of trading after raising $187 million in the biggest U.S. debut by a Chinese company this year.
American depositary receipts of the Beijing-based classifieds website surged 50 percent to $25.43 at 1:52 p.m. in New York. The company sold 11 million ADRs for $17 apiece, according to its statement, higher than its initial target range of $13 to $15, which was later raised to $15 to $16. Morgan Stanley, Credit Suisse Group AG and Citigroup Inc. were lead managers of the sale.
The sale became the fourth and biggest initial public offering by a Chinese company in the U.S. this year, after web retailer LightInTheBox Holding Co. raised $78.9 million in June, followed by China Commercial Credit Inc. and Montage Technology Group Ltd. The number of offerings has rebounded from a low of three in 2012 and is down from the 13 in 2011, data compiled by Bloomberg show.
“The market favors companies like us, so that we had to raise price targets twice before the IPO completed,” Jinbo Yao, 58.Com’s Chairman and Chief Executive Officer, said in a phone interview in New York. “I don’t like this jump in price right at the start of trading because that will put excessive pressure on our performance. I’d rather see our future business improvements reflected in gradual price appreciation.”
58.Com posted net income of $285,000 for the first half this year, compared with a net loss of $19.3 million a year earlier, its prospectus showed. The company’s revenue, mainly from merchant membership charges and sales from customers’ online marketing, jumped 51 percent to $58.8 million in the six months through June.
The company, founded in 2005 by CEO Yao, had grown its average quarterly paying business members 16 times since 2010 to 273,000 in the first half of this year.
Travel-booking website Qunar Cayman Islands Ltd. increased its IPO target price by as much as 26 percent yesterday, while online sports lottery operator 500.com Ltd. filed for a $150 million IPO Oct. 22.
The number of share sales have dropped from 38 in 2010, as allegations by short sellers such as Muddy Waters LLC against Chinese targets have deterred companies from selling shares in the past two years.
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