Fusion Soars, Taomee Falls on First Trading Day
As Fusion-io and Taomee made their trading debuts Thursday, investors made it clear—technology is in and Chinese companies are out.
Investors embraced flash storage company Fusion-io at the start of its first trading day, driving its shares up more than 30 percent on the New York Stock Exchange. On Wednesday, the Salt Lake City-based company raised $234 million by offering 12.3 million shares at $19, above the upwardly revised range of $16 to $18.
In the business of improving data-efficiency, Fusion-io was expected to see strong interest from investors. Having marquee-name customers like Facebook and Apple , and the star power of Apple’s co-founder Steve Wozniak as the company’s chief scientist, helped drive the excitement.
“Looks like investors think Apple is going to overwhelm Fusion with orders,” says Francis Gaskins, president of research firm IPO Desktop. In March of this year, Apple accounted for 20 percent of its sales. Facebook accounted for more than 50 percent of sales, but this number is expected to decline.
Meanwhile, Taomee , a China-based children's online portal, fell as much as 15 percent at the start of its first trading day at the NYSE. The company priced its IPO at $9, at the low end of expectations.
Chinese companies have been taking a beating lately. Poor aftermarket performance by recent Chinese IPOs, allegations of fraud and corporate governance issues at several companies, have made U.S. investors wary of the whole group.