The Fritz Demopoulos China Internet Top And The 2011 IPO Horror Show

  • Posted by
  • on November 30th, 2011

Of the 8 China Internet IPOs in 2011 only one–Qihoo ($QIHU)–is above its IPO price.

My understanding is that the remaining China Internet IPOs in the pipeline have been postponed either into 2012 or, for the unluckier ones, infinity. What looked to be a banner year for China investment bankers has turned into another difficult, low-paying slog.

Does anyone doubt that Qunar founder and CEO Fritz Demopoulus top-ticked an Internet bubble for the second time when he cashed out to Baidu ($BIDU) for a $306m investment in June? No way could Qunar have listed in this environment, and the valuation on any investment would have dropped significantly from June to today. Fritz is brilliant, incredibly hard-working, creates his own luck and has exquisite timing. I sold all my China Internet stocks within days of the news of the Baidu-Qunar deal. Nearly 6 months on the “Fritz Demopoulos China Internet Top” still holds.

There is another month left in 2012 and all these stocks could have miraculous recoveries. Good luck to those who want to bet on that, though for longer-term investors there may be good values in some of these names.

The charts of the 2011 China Internet IPOs are ugly, and for first day investors most of the shares are not even worth 50 cents on the dollar.

Qihoo, March 30 IPO price $14.50, November 29 closing price 16.10, 11% gain.

21Vianet ($VNET), April 21 IPO price $15, November 29 closing price $9.28, 38% loss.

 

Renren ($RENN), May 4 IPO price $14, November 29 closing price $3.77, 73% loss. Renren CEO Joe Chen sold approximately $50m of stock in the IPO.

 

NetQin ($NQ), May 5 IPO price $11.50, November 29 closing price $6.47, 43% loss.

 

Jiayuan ($DATE), May 11 IPO price $11, November 29 closing price $7.21, 34% loss.

 

Phoenix New Media ($FENG), May 12 IPO price $11, November 29 closing price $5.21, 52% loss.

 

Taomee ($TAOM), June 9 IPO price $9, November 29 closing price $4.78, 46% loss.

 

Tudou ($TUDO), August 17 IPO price $29, November 29 closing price $11.82, 59% loss.

 

 

The bankers certainly earned their fees, albeit at the expense of IPO investors who did not flip almost immediately.

You can follow me @Niubi on Twitter@Bill on Stocktwits and @Billbishop on Sina Weibo.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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