Reuters: Hot Stocks: UPDATE 3-China's Vipshop makes weak NYSE debut

Reuters: Hot Stocks Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 3-China's Vipshop makes weak NYSE debut Mar 23rd 2012, 15:36 Fri Mar 23, 2012 11:36am EDT * Sells 11 mln ADSs at $6.50 each, below indicated range * Shares fall as much as 12 percent By Jochelle Mendonca March 23 (Reuters) - Shares of Chinese online retailer Vipshop Holdings fell as much as 12 percent in their New York market debut as even a sharp cut in the offer price failed to overcome concerns about mounting losses and a complicated corporate structure. Guangzhou-based Vipshop, the first Chinese company to go public in the United States since last August, priced its offering at $6.50 per share, below its indicated range of between $8.50 and $10.50 per share. Earlier this week, the company told the U.S. Securities and Exchange Commission that some of its existing shareholders, including entities affiliated with venture fund Sequoia Capital, had agreed to buy $20 million of ADSs in the offering -- normally a positive sign -- but investors remained cautious. Though it operates in the booming Chinese consumer space, Vipshop hasn't posted a profit since 2009. Its losses for 2011 widened despite a jump in revenue. Vipshop's corporate structure is also a cause of concern. Known as a variable interest entity, or VIE, the structure lets Chinese companies bend certain rules forbidding foreign investment. Last year, Reuters reported that the China Securities Regulatory Commission authored a request to the State Council, the government's equivalent of a cabinet, asking it to take action against the VIE structure. Vipshop's IPO was seen as an indicator for other Chinese issuers hoping to tap U.S. markets. Four other Chinese companies have filed to go public in recent weeks, including AdChina, China Auto Rental, Cloudary Corp and Newsummit Biopharma Holdings. Vipshop, which raised $71.5 million through the IPO, offers over 1,900 branded products to consumers in China through flash sales on its vipshop.com website. Flash sales represent a new online retail format, combining the advantages of e-commerce and discount sales through selling a limited quantity of discounted products or services, for a fixed period of time. Goldman Sachs and Deutsche Bank Securities were the joint book-running managers for the offering. Vipshop's ADSs were trading down 10 percent at $5.84 in late morning trade on the New York Stock Exchange. They touched a low of $5.73 in early trading. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions