Shares in Chinese search engine Sogou remain flat after NYSE debut

Reuters

(SOHU), announced Wednesday that it has priced its initial public offering of 45 million American depositary shares, each representing one Class A Ordinary Share, at a price to the public of $13 per ADS.

Sogou's shares closed trading at $13.50, up 3.85 percent, on the New York Stock Exchange, valuing the company at $5.29 billion in market capitalization.

Shares then moved higher on Thursday, closing at $13.50, up close to 4 percent.

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The total IPO size would be $585 million, assuming the underwriters do not exercise their over-allotment option.

China-based Sogou Inc's (N:) shares rose more than 10 percent in their US market debut, as investors expect a massive base of Chinese smartphone users to help the Tencent-backed search engine company narrow the gap with market leader Baidu. The shares are expected to begin trading in the USA on Thursday.

Sogou brought in $597.2 million in revenue for 2016.

Backed by Tencent Holdings, Sougou has benefited from being the default search engine on various Tencent products that provide general search offerings, such as the Mobile QQ Browser, qq.com, WeChat and the PC Web directories daohang.qq.com and hao.qq.com.

Sogou was founded as a division of Sohu, a Chinese internet company that has advertising, gaming and other businesses. While Sogou didn't gain much interest, China Literature, on the other hand, was oversubscribed multiple times over with the company raising $1.1 billion and its shares surging 86 percent on debut.

Sogou Search is the second-largest search engine in China by mobile queries, and Sogou is the fourth-largest internet company in China, based on monthly active users in September, according to iResearch.

JPMorgan (NYSE:), Credit Suisse (SIX:), Goldman Sachs (NYSE:) and CICC were among the underwriters to Sogou's IPO.

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