VisionChina Media shares jump
NEW YORK—Shares of VisionChina Media Inc. gained as much as 17.5 percent in their debut on Thursday, after the digital advertising company's initial public offering of 13.5 million American Depositary Shares priced below expectations.
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The IPO priced at $8 per ADS, with each ADS representing one common share. The stock jumped 70 cents, or 8.8 percent, to $8.70 in afternoon trading. During the session, the shares have traded between $7.63 and $9.40. The daily high represents a 17.5 percent gain from the offering price.
The company had expected the IPO to price between $9.50 and $11.50 per ADS, according to Securities and Exchange Commission filings.
VisionChina's out-of-home advertising network uses mobile digital television broadcasts to deliver programs and ads on mass transportation systems in China, primarily buses. The Cayman Islands company operates through a subsidiary in China.
As of Sept. 30, VisionChina's network consisted of about 33,000 digital television displays in 14 Chinese cities. More than 230 advertisers have bought ad time on the network.
VisionChina is one of several Chinese digital advertising companies making bids to go public. Shares of AirMedia Group Inc., which manages an advertising network in Chinese airports, have gained about 20 percent since its IPO priced at $15 on Nov. 6.
CGEN Digital Media Co., which operates a television advertising network in Chinese retail stores, also plans an initial public offering.
For the nine months ended Sept. 30, VisionChina reported earnings of $3.7 million, before paying preferred dividends, compared with a loss of $1.8 million in the year-ago period. Revenue surged to $17.4 million from about $1.9 million in the first nine months of 2006.
Based on the offering price, VisionChina has a market capitalization of $546.8 million. The company raised about $108 million from the IPO, before deducting fees and expenses.
VisionChina plans to use about $85 million of the IPO proceeds to expand its network into new cities and new media platforms. The company will use the rest for general corporate purposes and potential acquisitions.
Credit Suisse and Merrill Lynch & Co. served as the IPO's lead managers. CIBC World Markets and Susquehanna Financial Group also served as underwriters. The underwriters have an option to buy up to about 2 million additional ADS from a group of shareholders to cover any overallotments.
VisionChina's ADS trade on the Nasdaq Global Market under the symbol "VISN."
