Qihoo 360 shares more than double in NYSE debut
NEW YORK, March 30 (Reuters) - The shares of Qihoo 360 Technology Co Ltd QIHU.N, China's third most-popular Internet company, soared in their debut on the New York Stock Exchange on Wednesday in an echo of the Chinese technology IPO euphoria of late 2010.
Qihoo's shares more than doubled to $32.10 after the company priced the offering $2 above the originally proposed range on Tuesday.
U.S. investors have been lured by Chinese Internet companies, eager to cash in on the booming growth of the number of Chinese Web users and the country's economy.
Qihoo 360 opens the door to tapping that market: It said it was China's leading provider of Internet and mobile security products and maker of the second most-popular Web browser, right behind Microsoft Corp's (MSFT.O) Internet Explorer.
Although so far this year Chinese IPOs have seen little traction, Qihoo's $176 million IPO comes close on the heels of a rush of similar Chinese Internet companies in the fourth quarter, such as online video company Youku.com Inc (YOKU.N) and Internet retailer E Commerce China Dangdang Inc (DANG.N).
The shares of both companies also soared in their NYSE debuts in December, rising 161 percent and 87 percent, respectively. Youku has since risen another 34 percent, while Dangdang erased some gains to trade 39 percent above the IPO price.
"The macro environment for Chinese stocks in general is very good," said Josef Schuster, founder of Chicago-based IPO investment firm IPOX Schuster LLC. "(Qihoo) is also pure technology, this is a hot sector."
Beijing-based Qihoo 360 and its stockholders planned to sell 12.1 million shares for $10.50 to $12.50 each, but then expected to raise pricing suggestions to a range of $13.50 to $14.50 because of "significant" investor demand, a source with direct knowledge of the IPO plans told Reuters at the time.
The source also said venture capital and private equity firms Sequoia Capital, Highland Capital Partners, Trustbridge Partners and CDH Investments agreed to buy $50 million of the company's shares in a concurrent private placement.
Qihoo 360's revenue increased 78.5 percent to $57.7 million in 2010 from the year before and almost doubled from 2008 to 2009, according to a filing with U.S. regulators.
The company became profitable over 2009, and its net income more than doubled to $8.5 million in 2010. Net income attributable to shareholders on a diluted basis was 5 cents per share in 2010, up from 3 cents in 2009 and compared with a 7-cent loss in 2008.
UBS Investment Bank (UBSN.VX)(UBS.N) and Citigroup Inc (C.N) led underwriters on the IPO. (Reporting by Alina Selyukh; editing by Lisa Von Ahn and Andre Grenon)