Tudou was one of just a handful of companies to price an IPO and begin trading amid tumultuous markets. However, after pricing at the midpoint of the expected range the shares closed their first day of trading at $25.56, or 11.9 percent below their IPO price.

"It's very clear that they mispriced this offering," said IPOfinancial.com President David Menlow. "The stock cratered right at the (opening) bell."

Tudou priced an IPO of 6 million American depositary shares at $29 on Tuesday.

The IPO price was the midpoint of a range that the company set on Aug. 3, before some of the sharpest recent declines in the S&P 500 index. The markets have since made up some of their losses but are still below where they were on Aug. 3.

Many IPOs were pulled due to the declines and volatility. Only two of the 12 IPOs scheduled for last week made it to the market, and both raised less money than expected.

"We've had a very tumultuous past two or three weeks. To not see a repricing on a deal ... is noteworthy," Menlow said. He added that Tudou was also losing money and investors are still skittish about Chinese stocks after a string of recent accounting scandals.

Tudou allows users to watch, upload, rate, comment on and recommend videos and is similar to Google Inc's YouTube and Youku.com Inc, another Chinese online video company which came public in the United States in December.

China is the world's largest Internet market by users and Tudou Chairman and Chief Executive Gary Wang said the most important thing right now is keeping pace with the market's growth.

"Audience, content distributors, and advertisers are all driving towards a bigger scale so we believe at this stage it's really crucial to scale up in terms of audience size, advertising revenue and so on," he said.

"With scale ... content costs and bandwidth costs will be easily leveraged," Wang told Reuters.

Tudou's registered user base and revenue have risen sharply in recent years but its losses have widened.

Underwriters on the IPO were Credit Suisse, Deutsche Bank Securities and Oppenheimer & Co.