Youku raises $203 million on NYSE, share price soaring 169%

10:53, December 10, 2010      

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China's leading video broadcasting website received $203 million capital through its IPO on the New York Stock Exchange (NYSE) Wednesday.

Though Youku has not yet broken even, investors are keen to acquire stocks. The company floated 15,847,700 depositary shares for $12.8 each in its IPO. The opening price was $27 and closing price soared by 169 percent to $34.38 per share. The capital will be used on technology reserves, bandwidth and servers, more video content, new products, marketing and sales.

Youku's monthly page views have already reached 200 million, and its operating revenue in the first nine months this year hit 234.6 million yuan ($35.24 million). But it still suffered a net loss of 167 million yuan ($25.09 million), as its expenses in purchasing bandwidth and video contents were high.

Victor Koo, CEO of youku, said that the company's decision to go public was based on its strategy of building its brand and distancing itself from competitors, and that capital is not the most important thing for the company, as it still has tens of millions of dollars in capital reserves. He also said that going public on the NYSE will give youku a better platform to develop in the next three to five years.

Youku and its competitor dominate China's online video broadcasting industry. The two companies both had plans to get listed in the US this year. But a court ordered a freeze of tudou's assets in early November - just one day before the company filed an application for an IPO to the US Securities and Exchange Commission - as Wang Wei, tudou's CEO, was involved in a property dispute with his ex-wife.

Source: Global Times


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