DealBook: JD.com Has Rousing Start in Trading Debut

Andrew Burton/Getty ImagesRichard Qiangdong Liu, left, the founder of JD.com, and Robert Greifeld, the chief of Nasdaq, celebrated the web retailer's initial public offering on Thursday. Related Links

The online Chinese retailer JD.com started life as a publicly traded company with a rousing start, beginning trading at $21.75 per American depositary share, above its initial public offering price.

At that price, shareholders valued the company at more than $29 billion.

JD.com is the latest of the Chinese Internet powerhouses to come ashore in the United States, listing on American markets in part to reflect their growth as global technology titans. The biggest, however, has yet to arrive: the giant e-commerce conglomerate Alibaba Group, which acts as an eBay, Amazon.com and Google rolled into one.

While I.P.O.s have underperformed in recent weeks – an exchange-traded fund created by Renaissance Capital that tracks recent initial stock sales has fallen 4.2 percent over the last month – the warm reception of JD.com reflects investor hunger for Chinese Internet stocks as a way to tap into that country's economic growth.

Indeed, the order book for the company's initial offering was 15 times oversubscribed, according to a person briefed on the matter.

As of late Thursday morning, JD.com shares were up 12 percent on the Nasdaq.

Compared with Alibaba, JD.com is smaller by revenue and valuation. The latter company functions most like Amazon.com, holding inventory and selling directly to consumers.

It now claims to be the biggest direct seller to Chinese consumers, with $20.7 billion worth of goods sold directly to customers last year.

Much of the company's appeal lies in the relatively unconquered Chinese e-commerce market. In its prospectus, JD.com noted that less than 50 percent of the country's population was online. And online shopping is expected to grow about 27 percent each year, according to the iResearch Consulting Group, which focuses on China's Internet sector.

Lang Lang/Reuters
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