China’s JD.com raises $1.8bn in Nasdaq IPO.
Chinese online retailer JD.com Inc., has recently under gone its initial public offering, managing to raise up to a total of 1.78 billion dollars. These results were quite higher then originally expected and indicates that e-commerce companies within the country are topics to increase an investors interest.
The company has been reported to also be selling shares of the biggest Internet company based in Asia, Tencent Holding, valued to be around 1.3 billion dollars. Both transactions have raised a total of 3.1 billion dollars altogether.
JD.com, which has a somewhat similar business model to that of Amazon. com, has sold its shares above the marketed range. It offered its shares for a somewhere between 16 to 18 dollars per share and manage to sell a total of 93.7 million American depository shares for the price of $19 apiece. JD.com has been listed on the Nasdaq Stock Market under the abbreviation of JD and its shares will begin to start trading soon.
As of recent, the market for technology initial public offering in the U.S. has not been highly alluring for investors due to their pessimism about the value of early-stage companies. The initila public offering, values JD.com some where around 26 billion dollars, which is around 2.3 times their last years sales of $11.5 billion. The offering is the largest one ever of a Chinese Internet company listing within New York.
The Initial public offering was a test in which was there to prove on whether fast-growing, but unprofitable online retailer would be able to gain the attention of investors or the current economic environment will become problematic.
The initial public offering of JD.com, comes during the same time as when another Chinese e-commerce company has been announced that it’s going public. Alibaba Group Holding ;td, which is far much larger then JD.com has been scheduled for its initial public offering for the U.S. during May. Despite that these two companies operation within the same market, they both use different business models.
Alibaba Group Holding unites sellers and purchasers together through the use of its platform, while JD.com in more focused on online-direct sales and operations its very own ware houses. The latter has also been focused on driving mobile purchasing on its website.