Shanda Interactive Entertainment Ltd ADS (SNDA)

[eastunder]

Shanda Baffles With Lackluster IPO
By James Rogers 09/25/09 - 12:22 PM EDT

http://www.thestreet.com/_yahoo/story/10603616/1/shanda-baffles-with-lackluster-ipo.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

SHANGHAI (TheStreet) -- Despite high expectations, shares of online gaming giant Shanda Games (GAME) fell in initial trading Friday, as investors gave a lukewarm reception to the year's largest IPO.

Within 25 minutes of their opening, the shares were down 79 cents, or 6.32%, at $11.71, far outstripping the modest decline in tech stocks that saw the Nasdaq slip 0.47%. The Shanghai-based firm priced its $1.04 billion offering at $12.50 a share, the high end of its projected range Thursday, the same day that battery maker A123 Systems (AONE) launched a highly successful IPO.

With the IPO market rebounding, Shanda raised the number of shares on offer by about 20 million to 83.5 million Thursday. The spin-off of Shanda Interactive Entertainment(SNDA Quote) is not the first Chinese game maker to take the public plunge. It follows Changyou.com's(CYOU Quote) April IPO.
Changyou.com shares have risen more than 100% since their debut, although there is a feeling that Shanda's IPO signals a top in Chinese gaming stocks.

Shanda's failure to catch the same wave as Changyou.com and A123 Systems left at least one IPO expert stunned.
"This is a complete shock," said Scott Sweet, senior managing partner of IPOBoutique.com. "This had more international demand than A123."
In the busiest week for IPOs since 2007, Sweet feels that Shanda's decision to significantly increase the number of shares on offer may have backfired.
"The increase in the size of this did not work well," he told TheStreet. "It seems to be that the amount of shares was too much for the market to absorb in a record week for IPOs."