Shanda Games shows its wrinkles
Investors looking to celebrate after buying into the US$1 billion Nasdaq listing of Shanda Games, the largest US-listed initial public offering (IPO) in more than a year, were left mystified late last month, their fingers burnt as the share price turned flat.
Shanda Interactive, China’s largest online game company, did all right for itself in spinning off Shanda Games, taking the unit to market at the top of an indicated range of $10.50-$12.50, and increasing the amount of shares offered by over 30%.
But by the end of the first day’s trading, buyers of the stock were counting their losses as the shares closed down 14% to $10.80, with little in the way of recovery since then, the price hovering at around $11.01- $11.70 and closing on Monday at $11.26.
That baffled many investors who were looking for a repeat of the success earlier this year of Changyou.com, a similar games-division spin-off by Sohu, China’s second-largest portal. Changyou shares surged 25% on their first day of trading on the Nasdaq in April. Read the article in Asia Times.
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