Shanda Games IPO gets tepid reception

Sep 25, 2009

(AP) -- Shanda Games Ltd., a Chinese video game company, raised $1 billion Friday in the largest initial public offering of the year.

The company offered more shares than expected, but got a lackluster reception. The shares dropped sharply on their first day of trading.

The IPO price was at the top of the company's expected price range of $10.50 to $12.50 per American depositary share. After that debut at $12.50, the shares fell $1.75, or 14 percent, to close at $10.75.

The Shanghai-based company publishes multiplayer online games, such as "The Legend of Mir II," that are popular in China. It had 9.7 million paying users for the April-June period, according to a regulatory filing.

The IPO came during the most active week for IPOs in almost two years. There were seven new offerings in just the past few days, according to Renaissance Capital's IPOHome.com.

Investors largely gave up on new offerings in 2008 as the dived. Only 43 companies went public in the U.S. last year, down from 272 in 2007, according to Renaissance.

Shanda Games, a of the leading Chinese online gaming company, Shanda Interactive Entertainment Ltd., is trading on the exchange under the symbol GAME. Shanda Interactive is keeping a controlling stake in the company.

Shanda Games said it plans to use the proceeds from its IPO for capital expenses and investments such as acquisitions and joint ventures. The bulk of its capital expenses go into its network infrastructure - servers, software and equipment required to run the games.

It is the second IPO this year for a Chinese gaming company. Changyou.com Ltd. raised $120 million in April, selling 7.5 million U.S. shares at $16 each. Those shares soared 25 percent on the first day of trading to close at $20.02. Since then the stock has gone as high as $48.37, and closed Friday at $37.23.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: US turns up heat on Takata over air bag problem (Update)

add to favorites email to friend print save as pdf

Related Stories

SolarWinds shares climb during first trading day

May 20, 2009

(AP) -- Shares of SolarWinds Inc. climbed Wednesday during the network management software maker's first day of trading, marking the latest flicker of life in an IPO market that has barely registered a pulse this year.

Vonage IPO points to VoIP weaknesses

May 25, 2006

So much for thinking telecoms might be going back to the heydays of 1999. After much fanfare, Internet telephone provider Vonage launched its initial public offering Wednesday, only to fall flat on its face. What's more, ...

EBay plans IPO for Skype, undoing $2.6B-plus deal

Apr 14, 2009

(AP) -- EBay Inc. plans to spin off its Internet communications service Skype through an initial public offering, undoing a $2.6 billion acquisition that puzzled analysts and eBay struggled to justify.

Recommended for you

Lenovo wraps up purchase of Motorola phone unit

7 hours ago

Lenovo Group announced the completion of its acquisition of Motorola Mobility from Google Inc. on Thursday in a move aimed at making the Chinese computer maker a global smartphone brand.

Baidu profit up 27 percent as mobile grows

10 hours ago

Chinese search engine Baidu Inc. said Thursday its quarterly profit rose 27 percent as user traffic for its mobile operation surpassed passed its desktop computer-based search business.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.