Yandex NV, owner of Russia’s most popular Internet search engine, jumped 38 percent in Nasdaq Stock Market trading after raising $1.3 billion in an initial public offering that sold above the proposed price range.
The shares, trading under the symbol YNDX, rose $9.50 to $34.50 at 10:53 a.m. New York time. The Moscow-based company sold 52.2 million shares, or a 16.2 percent stake, at $25 each, above the proposed range of $20 to $22, valuing the company at about $8 billion, Yandex said in a statement today.
Yandex, which has almost triple Google Inc.’s market share in Russia, is the biggest technology IPO worldwide this year as companies file for U.S. offerings at the fastest pace in seven years and demand for Internet stocks jumps. Last week, shares of Mountain View, California-based LinkedIn Corp. more than doubled on its first day of trading after the IPO raised $405.7 million.
“Yandex has picked a great time for an IPO for a tech company,” said Anthony Moro, managing director and head of emerging markets at Bank of New York Mellon Corp., which has about $1.1 trillion in assets under management. “For the longer term, they’re in the right spot. They’re the Google of Russia.”
The company, which sold 15.4 million shares while some of its shareholders offered 36.8 million shares, granted its underwriters an overallotment option, Yandex said in the statement.
Yandex’s had planned to sell shares at a price equivalent to at least 23 times next year’s earnings, based on the $21 a share midpoint of the initial offer range, two people involved in the sale said this week before pricing was announced. Google trades at about 13 times estimated 2012 earnings.
Yandex, co-founded by Chief Executive Officer Arkady Volozh and registered in The Hague, makes most of its revenue from advertising. Online advertising in Russia climbed 51 percent from 2008 through 2010, when it reached 26.65 billion rubles, according to the Moscow-based Association of Communication Agencies. Spending on print ads plunged 41 percent in the same period, while the radio and television segments fell 21 percent and 6 percent, respectively.
Russia’s Internet industry, the largest in Europe after Germany, is experiencing “rapid growth” and may account for 3.7 percent of gross domestic product by 2015, more than double the industry’s contribution in 2009, the Boston Consulting Group said in a May 18 report.
Use of Proceeds
President Dmitry Medvedev, who posts to online blogs and visited the San Francisco offices of Twitter Inc. during a trip to California last June, has made “modernization” a priority of his administration. About half of state budget revenue comes from energy sales.
About 70 percent of the stock in the IPO comes from existing investors, including Baring Vostok Capital Partners and Tiger Global Management LLC, according to the company’s filing.
Proceeds from the sale will be invested in technology, infrastructure and possibly acquisitions, the company said in the prospectus.
Morgan Stanley, Deutsche Bank AG and Goldman Sachs Group Inc. led the offering.
At least 230 companies have announced plans for U.S. IPOs so far this year, more than the same period in any other year since 2004, when 232 companies were on file, data compiled by Bloomberg show.
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