Tudou uses US IPO to raise funds to buy licensed content
NEW YORK - Tudou Holdings Ltd, China's second-biggest video website, is attempting a US initial public offering at a 62 percent discount to larger rival Youku.com Inc after equities plunged this month, sapping demand for new stock.
The Shanghai-based company is seeking to raise as much as $180 million by offering 6 million American depositary receipts for $28 to $30 each, according to a regulatory filing. That values the company at about 16 times sales in the 12 months through March 31. Youku.com, which went public in the United States last year, trades at 41 times.
Tudou's site offers user-generated videos as well as licensed and proprietary content. The company needs cash to invest in copyrighted movies and TV series to gain Internet traffic amid a crowded online-video market, according to Shanghai-based RedTech Advisors LLC. Even at the steep discount to Youku, Tudou's price range is high, according to David Menlow, president of Ipofinancial.com.
