Sogou's Shares Rise In IPO

Reuters

Reuters

Sogou is launching American Depository Receipts on the NY exchange, with each representing one of the company's Class A ordinary shares. At its session high the stock rose more than 13 percent.

The $585m raised does not take into account a so-called "greenshoe option" which allows the underwriters of the IPO to sell a further 6.75 million shares to cover oversubscriptions.

As we covered back in October, Sogou is a spin-off from Sohu.com Inc., the Chinese internet portal that itself floated on the Nasdaq exchange back in 2000.

China-based Sogou Inc's (N:) shares rose more than 10 percent in their US market debut, as investors expect a massive base of Chinese smartphone users to help the Tencent-backed search engine company narrow the gap with market leader Baidu.

"Under the lead of Xiaochuan, the (Sougou) team has been pushing forward for innovation in technologies and products and established competitive advantages to redefine the search by AI and big data", said Zhang Chaoyang, CEO of Sohu. Sohu.com will remain Sogou's controlling shareholder after the IPO.

In the last 12 months, Sogou generated $710.8 million in revenue and $66.5 million in net income.

Sougou is the second major Chinese tech stock to list this week after Tencent-owned China Literature debuted in Hong Kong on Wednesday.

J.P. Morgan, Credit Suisse, Goldman Sachs and CICC acted as the underwriters for the IPO and China Renaissance was co-manager.

Sogou's net income climbed 47 percent to $66.7 million in the nine months ended September 30.

The company will be issuing 45,000,000 shares at a price of $11.00-$13.00 per share.

The failure of the market to fully embrace Sogou's float and drive its share price north is not fully clear given previous Chinese tech companies going public in the USA have been popular.

Philippine President Rodrigo Duterte threatens to slap UN critic of drugs war
Woman turns unruly after discovering husband's affair midair, forces pilot to land