Back to main

Get ready for Yandex to hit the market

Posted
5/23/2011 11:40:00 AM
By: Emerging Money
Referenced Stocks:BIDU;CTCM

If you thought Baidu was a little expensive and Google was a little cheap, Russian search engine Yandex might hit the sweet spot. Yandex -- which drives 65% of all Web search traffic in Russia -- now looks likely to price its IPO at $24 to $25 a share, up from the $20 to $22 range expected before LinkedIn made its triumphant market debut last week. This would value the company at roughly double what GOOG ( quote ) fetches, but its P/E would still be roughly half as rich as the stratospheric 71 at which Chinese counterpart BIDU ( quote ) currently trades. Naturally, the Chinese Web market is theoretically growing much faster than the Russian market, which in turn is a lot less mature than the U.S. market that GOOG dominates. Institutional investors in Moscow are shrugging a little at the "scary" multiples, but note that there is not much sense in fighting the market for what is likely to be the hottest ticker symbol to com out of Russia in ages. At least online, Russian advertising spending jumped 51% over the last two years, compared to a 6% decline in TV ad budgets. Does this mean that a triumph for Yandex will come at the expense of TV-oriented CTC Media ( CTCM , quote ), which was previously the most obvious Russian media play out there? Hard to tell as yet. Russian stocks are now so deeply defensive that CTCM would probably be losing ground today either way: But with shares listing in New York, Yandex might not be a Moscow play so much as a global Internet play. And given crazy demand for anything related to the Internet in New York, tomorrow's IPO could be very interesting. Watch YNDX.