JD.com makes US de­but with $1.78b IPO

China Daily (Canada) - - ACROSSAMERICA - By JACK FREIFELDER in New York jack­freifelder@ chi­nadai­lyusa.com

Chi­nese e-com­merce site JD.com went pub­lic in an ini­tial of­fer­ing on the Nas­daq Stock Mar­ket that raised $1.78 bil­lion and claimed the ti­tle of big­gest IPO in the US by a Chi­nese com­pany, to date.

“This mo­ment be­longs to ev­ery mem­ber of the JD.com fam­ily,” JD CEO and founder Richard Liu said. “This is just a small step, but I want to thank all of the em­ploy­ees for their ef­forts,” Liu said through a trans­la­tor. “There is still a long way to go, but it is be­cause of them that we are here at Nas­daq to­day.”

JD, also known as Jing­dong Mall and backed by Saudi bil­lion­aire Prince Al­waleed bin Talal, is the big­gest di­rect seller of on­line goods in China. Op­er­at­ing out of its Bei­jing head­quar­ters, it of­fers di­rect pur­chases of prod­ucts from dis­trib­u­tors and man­u­fac­tur­ers through its web­site, and also over­sees an in­de­pen­dent net­work of de­liv­ery couri­ers and ware­hous­ing fa­cil­i­ties.

Not only was Thurs­day’s list­ing the big­gest IPO in the US by a Chi­nese com­pany to date; it also gave the firm a foothold in the US mar­ket ahead of its much larger ri­val, Alibaba Hold­ings Group Ltd, China’s No 1 e-com­merce firm. Alibaba’s IPO, ex­pected to be held later this year, could ex­ceed $20 bil­lion, ac­cord­ing to some es­ti­mates.

Man­agers of JD’s of­fer­ing sold 93.6 mil­lion Amer­i­can de­posi­tary shares ( ADS) at $19, above the mar­keted range of $16 to $18 apiece. Trad­ing un­der the sym­bol “JD”, shares opened at $19 and hit a high of $22.80 in the early morn­ing be­fore even­tu­ally clos­ing at $20.90, up $1.90, or 10 per­cent.

Man­ag­ing the deal for JD were Bank of Amer­ica Mer­rill Lynch and UBS AG.

JD is the lat­est in a string of Chi­nese com­pa­nies seek­ing to go pub­lic in the US. Last week, Jumei In­ter­na­tional Hold­ing Ltd raised $245.1 mil­lion with its IPO on the New York Stock Ex­change.

Kathleen Smith, prin­ci­pal at IPO in­vest­ment ad­vi­sory firm Re­nais­sance Cap­i­tal, said US in­vestors have a pen­chant for com­pa­nies based on an e-com­merce model.

“US IPO in­vestors are very in­ter­ested in get­ting ex­po­sure to the ex­plo­sive growth of e-com­merce in China,” Smith wrote China Daily in an email. “So far this year, the seven USlisted IPOs from Chi­nese com­pa­nies have risen 10 per­cent on their first day of trad­ing; how­ever, all but one have traded lower from there.”

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