China's JD.com jumps 10% on NASDAQ debut
Shares in PE-backed Chinese online retailer JD.com jumped nearly 10% on their first day of trading on NASDAQ following a $1.78 billion IPO.
The company priced its 93.7 million American Depositary Shares at $19 apiece, above the indicative range of $16-18. The offering was said to be 15 times oversubscribed.
The stock opened at $21.75, soared as much as 20% during trading and eventually closed at $20.73.
Founded by Richard Liu in 2004, JD.com is seen as a Chinese version of Amazon, operating as a direct seller of goods held in its own warehouses and supported by self-delivery services.
The company, formerly known as 360Buy and Jingdong.com, claims to be second-largest B2C e-commerce company in China after Alibaba Group, with an 18.3% market share based on transaction volume in 2013.
Revenue came to RMB69.3 billion last year, but JD.com still posted a net loss of RMB50 million. This followed revenues of RMB42.6 billion and a net loss of RMB1.7 billion in 2012. The company said it may continue to experience significant losses in the future as it will invest heavily in fulfillment infrastructures, such as warehouses and logistics systems.
Several private equity shareholders made partial exits via the IPO. Tiger Global Management sold 13.35 million shares, reducing its stake from 18.1% to 15.8%. DST Advisor's stake dropped from 9.2% to 8%, while Capital Today's holding fell from 7.8% to 6.8%. Two investment vehicles managed by Hillhouse Capital Management saw their combined interest fall from 13% to 11.3%.
The e-commerce has raised more than $1.7 billion in VC and PE funding in the last three years. Other investors include Kingdom Holding, an investment company controlled by Prince Alwaleed bin Talal, a Saudi Arabian billionaire, and Ontario Teachers' Pension Plan.
JD.com also sold shares to Tencent Holdings, Alibaba's major rival, after forging a strategic partnership with the company ahead of the IPO.
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