Vipshop IPO watch: Vipshop (NYSE: VIPS) stock landed on the New York Stock Exchange on Friday, but the Vipshop stock’s performance was poor on the first day of IPO (initial public offering), closing below the Vipshop IPO price.
Vipshop stock traded on the New York Stock Exchange at the IPO price of $6.50 per share on Thursday, lower than the previously announced Vipshop IPO price range of $8.50 to $10.50. Goldman Sachs Group and Deutsche Bank were working as the Vipshop IPO’s lead underwriters; Piper Jaffray, and Oppenheimer acted as the deputy underwriters on this deal. Vipshop sold 11 million of ADRs (American Depositary Receipt) in the IPO, each ADR represents two ordinary shares. The total amount of ordinary shares outstanding of Vipshop is 97.5 million after this public offering. Read more about the Vipshop IPO.
Vipshop generated revenues of $227.1 million in 2011, higher than the figure of $32.6 million in 2010. Gross margin was 19.1% versus 9.8% in 2010. Net loss was $156.5 million.
Venture capital firms DCM and Sequoia Capital hold a 14.8% stake and 14.9% stake in Vipshop, respectively, after the Visphop IPO.
Industry insiders pointed out although Vipshop realized significant increase in revenues in 2011, but the company has failed to generate profit since 2009.
Vipshop notified the U.S. Securities and Exchange Commission (SEC) a part of shareholders including Sequoia Capital’s subsidiary entity had agreed to purchase $20 million worth of ADRs in the IPO deal, which should have been usually a favorable factor, but investors were still cautious about the prospects of the Vipshop.
The Vipshop stock price once touched the intraday lowest level of $5.42 in the first trading day. By the closing bell, the VIPS stock closed down $1, or 15.38%, compared to the IPO price on the New York Stock Exchange.
Vipshop stock price