China's Tudou Files to Raise $120 Million in U.S. IPO
Tudou Holdings Ltd., the operator of China’s second-largest online video website, will seek to raise as much as $120 million in a U.S. initial public offering, a filing with the Securities and Exchange Commission showed.
The video broadcaster didn’t disclose a price range or a date for the IPO. Shanghai-based Tudou will use the proceeds to expand its Internet bandwidth and upgrade its technology as it competes with larger rival Youku.com in the world’s biggest Internet market, the filing showed.
Tudou will offer shares after the number of Internet users in China surpassed the entire U.S. population. Chinese companies have accounted for five of the ten best performing U.S. IPOs this year, with the biggest first-day rally coming from Beijing- based ChinaCache International Holdings Ltd., which provides content for business websites.
“You’re taking the two hottest things -- China and the Internet -- and putting them in one issue,” said Walter Todd, co-chief investment officer at Greenwood, South Carolina-based Greenwood Capital, which oversees about $900 million. “Internet-related businesses seem to be performing very well this year, so that’s another benefit.”
Credit Suisse Group AG of Zurich and Frankfurt-based Deutsche Bank AG will arrange Tudou’s IPO, the filing showed.
Tudou means potato in Chinese and is a playful reference to couch potato, Chief Executive Officer Gary Wang said in an interview in September. The company started its website in 2005 and has raised at least $135 million through five rounds of funding from investors including Crescent Point, IDG China, GGV Capital, General Catalyst and Singapore’s state investment company Temasek Holdings Pte.
The number of registered users on Tudou’s site more than quadrupled to 71.7 million through September of this year from 16.3 million at the end of 2007, the company said in its filing.
Youku of Beijing held about 18 percent of China’s online- video market in the first quarter of this year, while Tudou had about 13 percent, according to a Sept. 9 survey published by Analysys International, a Beijing-based research firm.
China had an estimated 420 million Internet users at the end of June, an increase of 36 million from six months earlier, according to data from the government-sponsored China Internet Network Information Center. The U.S. population is about 311 million, according to the Census Bureau’s website.
Chinese companies have accounted for 13 percent of the $19.2 billion raised through U.S. initial offerings this year, according to data compiled by Bloomberg excluding closed-end funds and investment companies.
ChinaCache rallied 95 percent on its first day of trading Oct. 1, the biggest first-day gain for a U.S. IPO in three years. SouFun Holdings Ltd., the Beijing-based operator of China’s biggest real-estate website, has gained 97 percent since its September IPO in New York.
Tudou’s American depositary receipts representing Class B ordinary shares will be listed on the Nasdaq Stock Market under the ticker TUDO, today’s filing said.
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