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CNBC ON DIGG

Second IPO of the Year Off to a Good Start

Published: Thursday, 2 Apr 2009 | 11:39 AM ET

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By: Yolaiki Gonzalez, Ariel Nelson

Another sign that the markets may be turning around is reflected in today’s initial public offering of the Chinese video game maker Changyou.com [CYOU Loading... () ]. Despite a slow IPO market, this will be the second company to go public this year, after the baby formula giant, Mead Johnson Nutrition [MJN Loading... () ] made its debut on February 10 at an initial price of $24/share, and is currently up 15% from its first day of trading (more on MJN's IPO here).

Changyou.com is a leading online game developer and operator in China which is being spun off by mainland Internet portal Sohu.com [SOHU Loading... () ]. Changyou.com developed the popular multi-player on-line game Tian Long Ba Bu and also operates the game Blade Online. It’s IPO which began trading today on the Nasdaq under symbol CYOU is up 36% from its initial public price of $16 for its American Depositary Shares. (Read about SOHU's strong financials)

Changyou.com reported revenue of $202 million in 2008, and is expected to generate $120 million from its IPO. The IPO market which has almost evaporated this year is showing strong signs of a come back as two more IPO’s, online college Bridgepoint Education and language software provider Rosetta Stone Inc. are expected to price in the U.S later this month. If Changyou.com, Rosetta and Bridgepoint price in April, it will be the first time since July 08 that three companies have gone public in the same month. The three deals that priced last July were China Distance Education [DL Loading... () ], GT Solar International [SOLR Loading... () ], and Energy Recovery [ERII Loading... () ] and are all down 19%, 57%, and 9% respectively from their initial offered price.