After everything you have seen from IPOs with a small float and with all of the accounting scares out of China, imagine a Chinese internet IPO today that is bringing out a limited float in an IPO. This is more or less the case for Tudou Holdings Limited (NASDAQ: TUDO). The company’s chief rival is considered to be Youku.com Inc. (NYSE: YOKU)
Tudou is a leading online video company in China and the company priced its initial public offering of 6,000,000 ADRs at $29.00 per share. Each ADR (or ADS) represents four Class B ordinary shares. The total offering is listed as $174 million without considering an overallotment exercise.
Credit Suisse and Deutsche Bank are the joint bookrunners and Oppenheimer & Co. is the sole co-manager of the IPO. Tudou granted the underwriters a 30-day overallotment option to purchase up 900,000 additional shares at the same terms as the offering.
The good news is that at least the bulk of the offering is being sold by the company itself: Tudou is selling 5,570,000 shares and the selling shareholder is selling 430,000 shares. The offering was within the proposed price range of $28.00 to $30.00 per share.
Another thing to consider is the reporting that the IPO was first filed back in November but it was delayed due to a CEO marital legal dispute over assets.
A research outfit in China called Analysis International puts the online video market share as follows: Youku.com Inc (NYSE: YOKU) at 23.4%, Tudou Holdings Limited (NASDAQ: TUDO) at 14.0%, and Sohu.com Inc. (NASDAQ: SOHU) at 13.0%. Youku.com has an implied market cap of $2.7 billion and at $23.92 its post-IPO range has been $19.78 to $69.95; Sohu has an implied market cap of about $3 billion and at $79.05 its 52-week range is $45.81 to $109.37. Tudou is actually said to have seen a lower market share than at the end of 2010.
A quick Wikipedia search under Tudou shows that this is the Romanized Chinese for “potato” and is supposed to be based on “couch potato” for more clarity.
JON C. OGG
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