Yandex Scores Big Open-Premium, Lessons of LinkedIn and Renren (YNDX, LNKD, RENN, GOOG, BIDU)

Yandex NV (NASDAQ: YNDX) has opened and the first print listed appears to be $38.50 and we have already seen almost 30 million shares trade by 11:10 AM EST with the last price seen right around $35.90.  This may not be a LinkedIn Corporation (NYSE: LNKD) premium, but this is still now worth about twice what the first IPO indications were.  This IPO may have serious ramifications for IT-companies in Russia and many other emerging markets.

The IPO was roughly 52.5 million shares which priced at $25.00 after a final price range of about $20.00 to $22.00 per share.  It is safe to assume that any overallotment has already been spoken for.

When a company is touted as “The Google of Russia” and on the backs of a mega-success like LinkedIn then the premium is going to go your way.  Despite today being the first day of short selling in LinkedIn shares, the stock is down only 0.2% at $88.11.

The reception is good enough that even Renren Inc. (NYSE: RENN) is up over 3.5% at $12.85 today.  That one is still a busted deal and still the source of much shareholder pain.  The company called “The Facebook of China” should have been called “The About-Face in China.” 

The comparison that many investors want to measure Yandex is either Google Inc. (NASDAQ: GOOG) or Baidu Inc. (NASDAQ: BIDU).  Whether you choose to use those for real comparison is up to you.  Yandex is the top site in Russia and has expanded to Belarus, Kazakhstan, and Ukraine.  Yandex was worth about $8 billion at the IPO price and that compares to $167 billion or so for Google and compares to about $45 billion for Baidu.

So, here is our take on Yandex and why this deal matters so much to the investing public.  Yandex is a Russian outfit.  We have seen many hot IPOs come out of China and India, but we have also seen many flukes.  Reverse mergers have tainted the reputation of what might have been otherwise respectable companies, and now it just hard to know “what is what” and “who is who” when it comes to China.  Investors have been taught over and over to gobble up the better investments of the BRIC nations of Brazil, Russia, Indian and China.  Investors just need to remember that corruption and political risks are generally key business risks in these lands compared to most developed nations.

A successful IPO from Russia could unleash many more ADR offerings.  We have seen almost no Russia IPO in America and Mail.ru went public in London.  If this one remains, it would seem logical that other Russian IT-companies and even other BRIC-based and emerging market companies will try to follow suit.

This one matters for many IPOs even if it was not listed in our TOP 17 IPOs TO WATCH IN 2011, and the real ramifications will depend upon whether or not this IPO can hold up.

JON C. OGG