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<p>Thanks to this, VCs in the United States <a href="http://online.wsj.com/article/SB123855265262576831.html?mod=googlenews_wsj">are seeing</a> some of the worst liquidity conditions in years.</p>
<p>But there is hope: Chinese online gaming company Changyou, a spin-off of Sohu.com Inc., <a href="http://blogs.ft.com/techblog/2009/04/changyou-a-winner-in-the-ipo-game/">proved that yesterday</a> with a successful debut on the NASDAQ. Traded under ticker symbol CYOU, investors bid the new issue up 25%. At one point in the day, it was up 38%.<big><strong></strong></big></p>
<p>Obviously a one day gain of 25% doesn't guarantee that Changyou will prove to be a good long-term investment but in today's market, being able to go public and drum up enough interest to close well above your offering price is quite a feat.</p>
<p>So is this a glimmer of hope for other mature startups or an anomaly? Perhaps a bit of both. Changyou, which operates a popular online martial arts game called <em>Tian Long Ba Bu,</em> pulled in $202m in sales last year and reported net income of $108m. A lot of startups that might otherwise go public don't exactly have those kinds of financials.</p>
<p>Another thing that helped Changyou's debut: it was <a href="http://www.reuters.com/article/businessNews/idUSTRE53131720090402?feedType=RSS&feedName=businessNews">priced at an attractive multiple</a> relative to its publicly-traded competitors and the number of shares offered was relatively small. Sohu.com Inc. still owns 70% of the company.</p>
<p>No matter how you slice it, Changyou demonstrates that if you have revenue, profit, a large market and a reasonable valuation, there's still an opportunity to go public even in the worst of times. <em>Perhaps startup investors just need to fund more Changyous.</em></p>
<p><em>Photo credit: <a href="http://www.flickr.com/photos/bfishadow/">bfishadow</a> via Flickr.<br /></em></p>
<p>Thanks to this, VCs in the United States <a href="http://online.wsj.com/article/SB123855265262576831.html?mod=googlenews_wsj">are seeing</a> some of the worst liquidity conditions in years.</p>
<p>But there is hope: Chinese online gaming company Changyou, a spin-off of Sohu.com Inc., <a href="http://blogs.ft.com/techblog/2009/04/changyou-a-winner-in-the-ipo-game/">proved that yesterday</a> with a successful debut on the NASDAQ. Traded under ticker symbol CYOU, investors bid the new issue up 25%. At one point in the day, it was up 38%.<big><strong></strong></big></p>
<p>Obviously a one day gain of 25% doesn't guarantee that Changyou will prove to be a good long-term investment but in today's market, being able to go public and drum up enough interest to close well above your offering price is quite a feat.</p>
<p>So is this a glimmer of hope for other mature startups or an anomaly? Perhaps a bit of both. Changyou, which operates a popular online martial arts game called <em>Tian Long Ba Bu,</em> pulled in $202m in sales last year and reported net income of $108m. A lot of startups that might otherwise go public don't exactly have those kinds of financials.</p>
<p>Another thing that helped Changyou's debut: it was <a href="http://www.reuters.com/article/businessNews/idUSTRE53131720090402?feedType=RSS&feedName=businessNews">priced at an attractive multiple</a> relative to its publicly-traded competitors and the number of shares offered was relatively small. Sohu.com Inc. still owns 70% of the company.</p>
<p>No matter how you slice it, Changyou demonstrates that if you have revenue, profit, a large market and a reasonable valuation, there's still an opportunity to go public even in the worst of times. <em>Perhaps startup investors just need to fund more Changyous.</em></p>
<p><em>Photo credit: <a href="http://www.flickr.com/photos/bfishadow/">bfishadow</a> via Flickr.<br /></em></p>
2009-04-03T04:04:43+01:00
0
1
html
<p><strong><img alt="" height="116" src="http://farm4.static.flickr.com/3102/3099537747_596a6dee43_m.jpg" style="margin-left: 5px; margin-right: 5px; float: right;" width="174" />The IPO market for technology startups seems all but shut these days thanks to the recession and financial system meltdown.</strong></p>
<p>The bar has been raised very high; much higher than most tech startups are confident they can reach.</p>
<p><strong><img style="margin-left: 5px; margin-right: 5px; float: right;" src="http://farm4.static.flickr.com/3102/3099537747_596a6dee43_m.jpg" alt="" width="174" height="116" />The IPO market for technology startups seems all but shut these days thanks to the recession and financial system meltdown.</strong></p>
<p>The bar has been raised very high; much higher than most tech startups are confident they can reach.</p>
false
3627
Who says you can't go public in today's market?
false
2009-04-03T10:50:50+01:00
who-says-you-cant-go-public-in-todays-market
2009-04-28T23:29:01+01:00
2009-04-28T23:29:01+01:00
1072