Ctrip.com International, the leading online hotel and airline consolidator in China, soared 89% in its first day of trading and delivered on its pre-IPO hype of being one of only a few profitable China-based Internet companies to list in the U.S. market. After pricing at $18 per ADS, well above its original price range of $14-$16, Ctrip.com opened for trading at $24 and traded as high as $37.35 before closing the day at $33.94. Ctrip.com’s first day return was the largest the IPO market has seen since November 6, 2000, when mobile processing chip maker Transmeta (TMTA) rose 115%. Its performance also trounced this year’s previously best first day pop of 47%, held by digital surround sound technology provider Digital Theater Systems (DTSI). Merrill Lynch acted as lead underwriter on Ctrip.com’s offering. Gross IPO proceeds totaled $76 million, 36% of which went to insiders.
While Ctrip.com’s small float and its exposure to the white-hot Chinese market were two of the key drivers to its strong first day gain, its debut also demonstrates that investors are not afraid to get their feet wet in less-established, rapidly-growing enterprises. In fact, a number of high-growth, small capitalization Internet names are gearing up to complete IPOs over the next two weeks, including another one from the Asian region. Among them are the third largest online travel portal -- Orbitz (ORBZ), Internet-based nonprofit software provider Kintera (KNTA), online flower and fruit retailer provide-commerce (PRVD), and Korean online game developer Webzen (WZEN).
