* Shares open at $17.50, above IPO price of $15
* Values company at about $811.3 mln at day's high
(Adds analyst comment, background)
By Amrutha Gayathri
Aug 7 Shares of iDreamSky Technology Ltd
rose as much as 27 percent in their debut, highlighting
the mobile game distributor's ability to cash in on the
popularity of hit games such as "Fruit Ninja" and "Subway
Surfers" in China.
IDreamSky has partnered with top game developers such as
Halfbrick Studios, Kiloo Group and Imangi Studios to distribute
their games in the Chinese market.
The Shenzhen, Guangdong-based company also redesigns games
to give them a local flavor.
For instance, it has added a customized payment method and
Chinese-style blades to Halfbrick's blockbuster "Fruit Ninja", a
game where users slice fruit flung across the screen.
The surging popularity of such games among smartphone users
in China helped iDreamSky to grow its revenue 13-fold to about
RMB 247 million ($41 million) and swing to a profit in 2013.
The IPO follows "Candy Crush Saga" maker King Digital
Entertainment Plc's dismal offering in March. King's
shares are trading 14 percent below their IPO price.
Zynga Inc, the social gaming firm known for
Facebook games "FarmVille" and "Mafia Wars," has also failed to
live up to investors' expectations. Its shares have lost 72
percent of their value since their listing in 2011.
Francis Gaskins, research director at Equities.com, said
iDreamSky's solid debut did not necessarily indicate a revival
of interest in gaming companies but signaled an appetite for the
company's ability to boost its revenue.
IDreamSky's shares touched a high of $19.05 on the Nasdaq on
Thursday, valuing the company at about $811.3 million.
The company is backed by some of the biggest names in the
Chinese technology industry.
Tencent Holdings Ltd, China's largest listed
internet company, is the biggest shareholder with a 23 percent
IDreamSky's chief executive and co-founder, Michael Xiangyu
Chen, is the second-largest shareholder with a 21.2 percent
Other shareholders include private equity firm Redpoint
Ventures, an early investor in TiVo Inc and Netflix Inc
, and Legend Holdings Ltd, the controlling stakeholder
of PC maker Lenovo Group Ltd.
IDreamSky raised $115.5 million after its initial public
offering of 7.7 million American Depositary shares were priced
at $15 each, above the expected range of $12-$14 per share.
The company, which also distributes games from Walt Disney
Co and Gameloft SA, said it plans to use the proceeds
from the offering to acquire game licenses, other intellectual
property rights and for acquisitions.
More than 10 Chinese companies have debuted in the United
States so far in 2014, according to Thomson Reuters data.
Chinese online retailer Alibaba Group Holding Ltd IPO-BABA.N
is expected to debut later this year.
Credit Suisse Securities (USA) LLC, J.P. Morgan Securities
LLC and Stifel, Nicolaus & Co Inc were the lead underwriters for
(Reporting by Amrutha Gayathri; Editing by Saumyadeb