Feeding an appetite in the West for Chinese Internet company stocks, a new initial public offering is ready to ignite.
Under the symbol GAME, China-based online entertainment firm Shanda Games plans to start trading on Nasdaq on Friday in what is planned to be the largest initial public offering in the United States this year.
Priced at USD12.50 per share, the company plans to raise USD1.044 billion. The company is a spin-off of its parent company Shanda Interactive Entertainment Limited. The parent will continue to hold 71% in Shanda Games and an ominous 96% of voting rights in the newly-minted IPO.
Shanda Games claims to have hit revenues of USD322 million and profit of USD98 for the half year ended June 30, 2009.
Shanda Interactive Entertainment Limited's consolidated net revenues for the second quarter ended June 30, 2009, increased 47.7% year-over-year and 11.8% quarter-over-quarter to CNY1.237 billion. Operating income increased 53.0% year-over-year and 12.7% quarter-over-quarter to CNY513.4 million.
Other Chinese online games are not doing as well, perhaps a sign that smooth revenues may be difficult to attain in China. Shanda's rival The9 posted a poor showing for the first half of this year.
Owing to its loss of the World of Warcrafts game to rival Netease.com, The9 had a CNY79.2 million net loss in the second quarter ended June 30, 2009. The struggling online game company announced its unaudited financial results for the quarters ended March 31, and June 30, 2009. Net revenues for the first quarter of 2009 increased by 4% quarter-over-quarter and decreased by 3% year-over-year to CNY426.2 million. Net loss for the first quarter was CNY46.8 million, a 70% decrease from net loss of CNY158.3 million in the fourth quarter of 2008, and a decrease in earnings of CNY122.4 million compared with the net income of CNY75.6 million in the first quarter of 2008.