Thursday, October 25, 2007

Wall Street Journal on Chinese IPO - LFT, FUQI, etc.

Congrats to ChinaIPO! CI's posts on our blog provided insightful information and many blogs around the world syndicated CI's articles. It has been the most popular articles in Cyber space according to StatCount report:

*** marketswimmer.blogspot.com/2007/10/fuqi-international-fuqi.html
** marketswimmer.blogspot.com/2007/10/longtop-financial-technologies-limited.html
* marketswimmer.blogspot.com/2007/10/crystal-ball-report.html

In today's Wall Street Journal, the news finally broke out:

Latest China IPO in U.S. Soars 85%


Longtop Financial Wows, Eclipsing
U.S. Energy Firm
By LYNN COWAN
October 25, 2007; Page C3

For the second day in a row, U.S. investors were wowed by the initial public offering of a Chinese company and paid less attention to an American energy company.

The resulting market activity sent the IPO of Chinese software maker Longtop Financial Technologies Ltd. up 85% yesterday on the New York Stock Exchange, the second-best IPO debut of the year, after Athenahealth Inc.'s top 97% gain. Meanwhile, the day's other IPO, Vanguard Natural Resources LLC, fell below its IPO price.

On Tuesday, a similar theme played out: Chinese jeweler Fuqi International Inc. rose 16% on its first day of trading on the Nasdaq Stock Market, while Kansas petroleum refinery CVR Energy inc. gained 7% on the NYSE.

Longtop closed at $32.40 a share, up from its IPO price of $17.50. It sold 10.4 million American depositary shares at a price above its expected range of $14 to $16, which had already been raised by $2 last week.

Based in Xiamen, China, Longtop is a software developer and technology-services provider that focuses on financial institutions in that country, including three of the four largest state-controlled banks: China Construction Bank, Agricultural Bank of China, and Bank of China.

Derek Palaschuk, the company's chief financial officer, said, "The banking infrastructure and business processes are so different in China that a lot of solutions from U.S. companies just don't work."

The company plans to use its IPO proceeds in part to purchase an office building in Xiamen and to pay dividends to its former private owners; the company doesn't intend to pay dividends to new shareholders who purchase stock in the IPO. Goldman Sachs Group Inc. was the global coordinator for the IPO.

In contrast to Longtop's swift gains, energy company Vanguard Natural Resources' IPO stalled on its first day of trading.

The stock closed at $18.94 a share on NYSE Euronext's NYSE Arca marketplace, down about 1% from its IPO price of $19 a share. The company sold 5.25 million units at a price at the low end of its expected range.

Vanguard is an oil and gas exploration company with properties located in Kentucky and Tennessee.

The units it sold in the IPO represent limited-liability interests in its underlying business, a tax structure that allows it to pay out available cash in the form of a generous dividend. Vanguard intends to pay an annual dividend of $1.70 a share, which at the IPO price equates to a yield of nearly 9%.

Energy companies structured as partnerships haven't fared well with investors recently. The last two, Encore Energy Partners LP and Quicksilver Gas Services LP, ended their first days of trading flat.

Citigroup Inc. was the book-running manager on Vanguard's offering.

Write to Lynn Cowan at lynn.cowan@dowjones.com

Link to WSJ: Latest China IPO in U.S. Soars 85%
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If you read CI's report on October 15th, you could have made some money:

FUQI International (FUQI)
Longtop Financial Technologies Limited

3 comments:

Mkt swimmer said...

Hi hott,

Listen to Vince Rowe, I just added his radio show onto my post as a little microphone icon. He wiil go over a little bit on why you only need a few good stocks and you need to have a trading plan.

If you get level II, GS will be there, transparent. Well they will try to trick you, but if you are good, you can read through it. I will stop there.

Good luck,

Market Swimmer

P.S. I need some work on the Education page, pull away for a little while, will reappear with all the icons, links, professional stuff later.

Unknown said...

hey swim i had level 2 TOTALVIEW-most stocks i traded i only NITE NSDQ UBS ARCA etc etc never recall GS-maybe they were not in on the stocks i was into HHHRRRMMM...
or maybe its not tru level 2
okay
so if you see GS on level two how do you identify what they are doing in public? cant they hide and trade BLACKPOOL or after hours VWAP at close or somthing like that?-are GS letting themselves be seen for a reason?
can they make you think they are buying when actually they are selling?
i hear the trading programs are very sophisticated-more input please thanks have a nice weekend SWIM-spud

Mkt swimmer said...

Look for GSCO, if you can not see it, you need to change your system.

Swimmer