Taomee Not Ready for Prime Time as IPO Tanks 淘米错过互联网IPO黄金时代

By newsdoug on June 10, 2011

After pricing its IPO at the bottom end of an indicated range, kids Website operator Taomee (Nasdaq: TAOM) has shown it’s truly not ready for prime with an equally unimpressive debut that saw its stock sink 8.6 percent on its first trading day. (English article) The company cautioned in its prospectus that internal controls were one of its potential weaknesses, which surely didn’t help market concerns about Chinese company accounting in light of the ongoing scandal surrounding New York-listed Longtop Financial (NYSE: LFT). I should also be fair in saying that broader sentiment towards Chinese Internet companies has cooled considerably in the last couple of weeks, partly due to accounting concerns but also partly because a correction was sorely needed after a huge run-up this year. After surging 30 percent on its debut last month, shares of social networking site Renren (NYSE: RENN) are now actually trading 35 percent below their IPO price. Money-losing video-sharing site Youku (NYSE: YOKU) has lost more than half its value since mid-April, though it’s still more than double its IPO price from late last year. Even industry stalwarts Sina (Nasdaq: SINA) and Baidu (Nasdaq: BIDU) are feeling the pinch, down 23 percent and 13 percent, respectively, over the last week. The clearly cooling sentiment doesn’t mean that all new Chinese IPOs will be flops, but rather that investors will only buy quality stocks with strong top- and bottom-lin growth potential, and won’t just fork over big bucks for any Internet play with the “made in China” label.

Bottom line: Taomee’s IPO flop signals a more cautionary investor approach to China Internet IPOs, and could put a big damper on new offerings for the next 3-6 months.

运营儿童网站的中国淘米网<TAOM.N>近日进行首次公开募股(IPO)，发行价定在了发行区间的下限，而其上市首日表现也不尽人意，当日重挫8.6%，充分表明该公司未能搭上互联网IPO黄金时代的顺风车。淘米在招股说明书中警告称，内部控制是该公司的潜在弱点之一。由於在美国上市的中国企业–东南融通<LFT.N>的财务丑闻调查还在进行之中，淘米的这种说法当然无助於缓解市场对中资公司财务状况的担忧。公平地说，过去一两周，投资者对中国互联网企业的广泛兴趣已大幅冷却，部分是由於担忧其财务状况，部分也因为在经历了今年的猛涨後，市场亟需进行修正。社交网站人人网<RENN.N>上月上市首日股价飙升30%，但目前股价比其IPO价格低35%。自四月中旬以来，视频分享网站优酷<YOKU.N>股价也缩水一多半，不过其股价依然高於其IPO价格的一倍多。就算是互联网行业的中流砥柱新浪<SINA.O>和百度<BIDU.O>也倍感压力，上周其股价分别下挫23%和13%。市场情绪冷却并不意味着所有中国企业的IPO都会遭遇失败，但说明投资者只会买入那些有着巨大增长潜力的绩优股，而不会只青睐那些所有打着“中国制造”标签的互联网企业。

一句话：淘米IPO的失利说明，投资者对中国互联网企业的IPO愈发谨慎，这
可能会抑制未来3-6个月的新股发行。

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