China search-engine company Sogou (SOGO) raised $585 million in an initial public offering that priced shares at the high end of its estimated range.
Beijing-based Sogou priced 45 million American depositary shares at 13 late Wednesday, having set an estimated price range of 11 to 13. Sogou will list on the New York Stock Exchange under the ticker SOGO and is set to begin trading Thursday.
Based on data from iResearch, Sogou says it’s the second-largest search engine in China by mobile queries, behind Baidu.com (BIDU), though Baidu is much larger. For the third quarter, Sogou reported revenue of $257.3 million, up 55% from the year ago period, while Baidu reported third-quarter revenue of $3.53 billion, up 29%.
Baidu shares were down 1.5%, near 237.60 during morning trading in the stock market today.
China-based Sohu (SOHU) an internet service company that includes search and gaming platforms, holds the largest stake in Sogou. Sogou is also backed by China-based internet giant Tencent Holdings (TCEHY). Sogou said it plans to deepen its relationship with Tencent, which is China’s leader in messaging services.
IBD’S TAKE: The biggest stock market winners typically make their major price moves within a few months or years of their initial public offering. So it pays to identify and track companies that are ready to go or have recently gone public. Learn more at IBD’s IPO page. IBD also focuses on the best-performing IPOs of the past three years in its IPO Leaders column.
Sohu, Tencent Holdings and members of Sogou management will together have approximately 97.1% of total voting power, according to the Sogou prospectus. Sohu will be the controlling shareholder.
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