Sogou Rises In Debut After China Search-Engine IPO Prices High

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China search-engine company Sogou ( SOGO ) raised $585 million in an initial public offering that priced shares at the high end of its estimated range as it began trading Thursday morning.

[ibd-display-video id=2551170 width=50 float=left autostart=true] Beijing-based Sogou priced 45 million American depositary shares at 13 late Wednesday, having previously set an estimated price range of 11 to 13. Sogou shares ended trading up 3.9% to 13.50 on the stock market today .

Based on data from iResearch, Sogou says it's the second-largest search engine in China by mobile queries, behind ( BIDU ), though Baidu is much larger. For the third quarter, Sogou reported revenue of $257.3 million, up 55% from the year ago period, while Baidu reported third-quarter revenue of $3.53 billion, up 29%.

Baidu's search-engine market share in China was 83% in October, compared with 3.6% at Sogou, according to Statcounter . Sogou says it had 511 million monthly active users on its Sogou Search platform, at the end of September.

China-based Sohu ( SOHU ) an internet service company that includes search and gaming platforms, holds the largest stake in Sogou. Sogou is also backed by China-based internet giant Tencent Holdings ( TCEHY ). Sogou said it plans to deepen its relationship with Tencent, which is China's leader in messaging services.

IBD'S TAKE:The biggest stock market winners typically make their major price moves within a few months or years of their initial public offering. So it pays to identify and track companies that are ready to go or have recently gone public. Learn more atIBD's IPO page. IBD also focuses on the best-performing IPOs of the past three years in itsIPO Leaders column .

Other companies investing heavily in search include China e-commerce leader Alibaba ( BABA ). Baidu, Alibaba, Tencent and Sohu are among the best Chinese stocks to buy and watch .

Sohu, Tencent Holdings and members of Sogou management will together have approximately 97.1% of total voting power, according to the Sogou prospectus . Sohu will be the controlling shareholder.

Other IPOs this week include Workspace Property Trust, a real estate investment company primarily focused on "acquiring, owning and operating high-quality office and flex real estate in prime locations," according to the Workspace IPO prospectus .

Workspace plans to raise $527 million, offering 39 million shares at a range of 12 to 15. It's scheduled to begin trading Friday on the NYSE under the ticker WSPT.

Also ready for its IPO is Bandwidth, which provides a cloud-based communications platform, using an internet protocol voice network, with a broad range of software application programming interfaces for voice and text functionality, according to the Bandwidth IPO prospectus .

Bandwidth plans to raise $84 million, offering four million shares in the range of 20 to 22. It will trade Friday on the Nasdaq under the ticker BAND.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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