JD.com makes US debut with $1.78b IPO
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.”