China’s second-largest video website, Tudou, had a rocky first day’s trading on New York’s Nasdaq.
On Tuesday evening, Tudou said it would offer 6 million shares at $29 a piece, raising $174 million in the initial public offering and valuing the company at $3.2 billion. Its IPO was over-subscribed on Monday, according to local reports.
However, shares in the Shanghai-based site — a cross between Netflix and YouTube — opened 13% down at $25.11 on Wednesday, dropping its valuation to $2.8 billion.
At the market’s closing bell, rung by Tudou execs to celebrate the first day of trading, the share price stood at $25.56, down 11.9%.
The IPO values Tudou at around one third the size of market leader Youku.com, which listed last year.
Tudou had around 14% of the online video advertising market in China at the end of the second quarter, down from 17% at the end of last year, while rivals Youku increased 2% to 23% and Sohu.com rose 5.1% to 13%, according to data from Beijing-based Analysys Intl.
Tudou had planned to launch its IPO before Youku, but the effort stalled in November due to a lawsuit over company assets brought by the former wife of the company’s CEO, Gary Wang.