* YY first Chinese company to list in U.S. since March
* Transparency, growth concerns hindered enthusiasm for
* China firms increasingly go private as public valuations
(Adds comments by CFO, updates stock price)
By Olivia Oran
Nov 21 YY Inc shares rose as much as 12
percent in their Nasdaq debut on Wednesday, as the social media
platform sought to revive a U.S. IPO market for Chinese
companies after an eight-month lull.
Shares climbed to $11.75 after opening at $10.50. Around
midday, the stock was up 8.4 percent at $11.38.
A spate of Chinese companies hit U.S. exchanges in 2010, but
the market for these offerings largely dried up as China faced
questions about growth, corporate governance and transparency.
Scandals at Chinese companies including Sino-Forest Corp
and Longtop Financial Technologies also
YY's sale of 7.8 million American depository shares raised
$81.9 million. The company had intended to price shares in a
range of $10.50 to $12.50.
YY offers online games, karaoke, music-concert and
educational services through its platform to more than 400
million Internet subscribers. Investors include Walt Disney Co
venture arm Steamboat Ventures and hedge fund Tiger
YY's net sales more than doubled to 319 million yuan ($50.8
million) for fiscal-year 2011. The company posted a profit of
20.8 million yuan ($3.3 million) for the six months ended June
The last U.S. initial public offering of a Chinese company
was Vipshop Holdings Ltd's in March. Shares of the
online flash sales site have nearly doubled since their debut,
after an early stumble. Shares of Vipshop, which priced at
$6.50, were down 0.5 percent at $12.40 at midday on Wednesday.
In May, car-rental provider China Auto Rental Holdings
pulled its $138 million offering after poor investor
A slew of publicly traded Chinese companies have also
decided to go private as their shares fell on U.S. exchanges.
But the tide may be turning for Chinese companies, said
Thomas Rice, a partner at law firm Baker & McKenzie LLP in New
York who has worked with Chinese companies.
"The leadership in China is probably getting tired about
hearing about these problems, and the Chinese take the prestige
of listing in the United States very seriously," he said. "It
will never be perfect, but I think companies and underwriters
are more seriously vetting who they let consider listing here."
A successful listing for YY could also open the door for
other Chinese companies looking to list in the United States. A
number of Chinese Internet firms are weighing listing here
including online travel site Qunar, online retailer 360buy.com
and online shopping site LightInTheBox,, sources previously told
"There are a lot of good Chinese companies looking at us as
a harbinger to see if we can become an ice-breaker to be listed
in the U.S. markets," YY's chief financial officer, Eric Ho,
said in an interview.
YY's IPO is being underwritten by Morgan Stanley, Deutsche
Bank AG, Citigroup, Pacific Crest Securities and Piper Jaffray.
YY will use proceeds to invest in technology and
infrastructure, product development and sales and marketing as
well as for other general corporate purposes.
($1 = 6.2339 Chinese yuan)
(Editing by Gerald E. McCormick, David Gregorio and Matthew