Vipshop Climbs After LightInTheBox IPO: China OvernightBelinda Cao
Chinese equities rose the most in a week in New York as online retailer Vipshop Holdings Ltd. rebounded from a seven-week low after e-commerce operator LightInTheBox Holding Co. surged in its first day of trading.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. climbed 1 percent to 89.87 yesterday. Vipshop gained for the first time in four days and Baidu Inc. jumped the most in two weeks. Ctrip.com International Ltd. surged to the highest level since 2011 while web game operator Giant Interactive Group Inc. sank to the lowest in six weeks after pricing shares at a discount in a secondary offering.
LightInTheBox soared as much as 34 percent in New York after raising $78.9 million in its initial public offering. The Beijing-based online retailer has become the second Chinese e-commerce company to complete a U.S. IPO in 15 months. Shares of Vipshop, a Guangzhou-based online fashion retailer, have more than quadrupled since its U.S. listing in March 2012.
“LightInTheBox benefited from the great performance of Vipshop,” Josef Schuster, the founder of IPOX Schuster LLC, an investment firm based in Chicago with about $2.5 billion under management, said by phone. “Companies in the Internet retailing space are going to be well received for the time being.”
The iShares FTSE China 25 Index Fund, the largest Chinese exchange-traded fund in the U.S., rallied 0.6 percent in New York to $35.92, after dropping the previous two days. The Standard and Poor’s 500 Index gained 0.8 percent to 1,622.56 as investors weighed the Federal Reserve’s stimulus plans before a U.S. report on employment growth today.
Vipshop’s ADRs advanced 3 percent to $29.46 after a three-day decline sent them to the lowest level since April 18. LightInTheBox jumped 22 percent to $11.61 yesterday in New York after climbing to as high as $12.69. It sold 8.3 million ADRs in the initial offering before the underwriters purchase additional shares, according to its statement yesterday. The IPO price valued LightInTheBox’s outstanding stock at $465 million, or almost 2 times its revenue of $236 million in the 12 months through March 31.
ADRs of ISoftStone Holdings Ltd., an information technology company based in Beijing, surged 8.3 percent to $5.24. The company received a $5.85-per-ADR buyout offer from Chairman and Chief Executive Officer Tianwen Liu and China AMC Capital Management Ltd., it said in a statement yesterday.
Twenty three U.S.-traded Chinese companies completed their buyout deals since the beginning of 2010, out of a total 42 announced, according to data compiled by Bloomberg.
Baidu’s ADRs climbed 4.1 percent to $98.89, rising the most since May 20. Ctrip, China’s biggest online travel agency, jumped 6.3 percent to $32.91, the highest price since November 2011.
Giant, based in Shanghai, said yesterday a holding company owned by Chairman Yuzhu Shi has agreed to sell 11 million ADRs of Giant for $7.25 each in a secondary offering. The price represents a 15 percent discount to the closing level June 4 before the share sale plan was announced.
Giant’s ADRs sank 7.3 percent to $7, the lowest close since April 19. It tumbled 18 percent in the last two days.
The Shanghai Composite Index of domestic Chinese shares sank 1.3 percent in its sixth day of declines to 2,242.11. The Hang Seng China Enterprises Index in Hong Kong lost 1.1 percent to 10,361.22, the lowest level since April 18.