A Chinese firm often referred to as the Craigslist of China, 58.com Inc. (WUBA) sold 11 million American Depositary Shares (ADS) in its initial public offering Thursday morning at an IPO price of $17 a share. The underwriters have an over-allotment option on an additional 1.65 million ADSes. Each ADS represents two class A ordinary shares.
The IPO price was well above the initial expected range of $13 to $15 and even higher than the final estimated range of $15 to $16. Shares just took off from there, rising to a high of $27.00 by mid-morning.
The company has adopted a dual-class share structure, and Class A shares will amount to 27.24 million shares outstanding immediately after the IPO if the underwriters exercise their overallotment option. There will also be 131.81 million Class B shares outstanding after the IPO, representing 82.9% of all outstanding shares and 98% of total voting power. Class B shares get 10 votes per share and Class A shares are entitled to a single vote per share. Company executives and directors will own 122.46 million Class B shares after today’s IPO.
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58.com raised about $187 million in net proceeds from the IPO and plans to use the funds for general corporate purposes, “which may include investment in product development, engineering capability, sales and marketing activities, technology infrastructure, capital expenditures, improvement of corporate facilities and other general and administrative matters.” The company also said it may use a portion of the proceeds for acquisitions or investments in other companies.
Shares of 58.com’s stock are up more than 50% in the early afternoon on Thursday at $25.56.