A fast-growing Chinese developer of online fantasy
games is the latest company to test investors' appetite for initial
s in the U.S.
ChangYou.com Ltd., which is being carved out of China-based Internet portal
Sohu.com Inc., could sell shares worth as much as $120 million as part of its listing on Nasdaq planned for April 2.
The company is quite different from the mere two IPOs in the U.S. over the past seven months: online college Grand Canyon Education Inc.'s $144.9 million offering
in November and Mead Johnson Nutrition Co.'s $782 million deal in February, including overallotment options for both deals to meet strong demand. Education companies are considered somewhat defensive
plays during tough job markets, and Mead Johnson's 100-year track record in infant nutrition
gave it great world-wide brand recognition.
ChangYou.com, on the other hand, unveiled its first product just two years ago and earns its money by creating online role-playing games for the Chinese market. Its products include a fantasy
2-D martial-arts saga called Tian Long Ba Bu, based on a book that translates into 'Novel of Eight Demigods.'
But ChangYou.com's growth since Tian Long Ba Bu's launch
in May 2007 is very real. Revenue in 2008 leapt nearly fivefold to $202 million, while net income rose by a factor of 20 to $108 million, compared with 2007.
'Their numbers are amazing,' said Ben Holmes, publisher
of research site Morningnotes.com. 'It's also a very small deal with just 7.5 million shares, so it's set up right away with scarcity
Unlike common U.S. game formats that use consoles, China's gaming community
focuses on games that can be accessed online through personal computers by hundreds of thousands of players simultaneously
. ChangYou.com allows users to play its games for free, and makes money by selling virtual items, such as gems or skills.
Though gaming is certainly not considered a basic necessity during tough economic times, Mr. Holmes said it is a relativelyinexpensive
treat that people turn to during periods of stress.
'It's a form of escapism during bad times,' he said.
从互联网门户网站搜狐公司(Sohu.com Inc.)剥离出来的畅游网(ChangYou.com Ltd.)计划发售价值1.2亿美元的股票，并于4月2日在纳斯达克上市。
该公司与过去7个月来美国市场仅有的两起上市交易──一宗是去年11月的网络大学Grand Canyon Education Inc.，发行额1.449亿美元，另一宗是今年2月的Mead Johnson Nutrition Co.，发行额7.82亿美元──非常不同。这两起交易为满足投资者强劲需求都设置了超额配售权。在就业市场的严峻形势下，教育类股被认为有一定的抗跌特性，而Mead Johnson过去100年来在婴儿营养市场上的业绩纪录使其在全球获得了出色的品牌认知度。