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JD.com prices IPO at $19

  • JD.com's (JD) IPO price is above a $16-$18 range, and implies a valuation of $26B for China's second-biggest e-commerce firm.
  • JD stands to raise $1.3B by issuing 69M new shares, and is also selling 24.7M on behalf of existing holders. Shares begin trading tomorrow.
  • Prospectus, IPO analysis
  • Earlier: JD.com's IPO reportedly 15x oversubscribed
Comments (6)
  • James Sands
    , contributor
    Comments (1947) | Send Message
     
    How is the $26 billion valuation calculated?

     

    F-1/A states 94-108 million ADSs to be outstanding immediately after the offering.

     

    "Each ADS represents two of our Class A ordinary shares, par value US$0.00002 per share."

     

    "2,734,171,730 ordinary shares, comprised of 2,177,875,831 Class A ordinary shares and 556,295,899 Class B ordinary shares (or 2,763,756,650 ordinary shares if the underwriters exercise their over-allotment option in full and Huang River Investment Limited exercises its option to further subscribe to Class A ordinary shares to maintain the 5% proportionate size of the concurrent private placement, comprised of 2,207,460,751 Class A ordinary shares and 556,295,899 Class B ordinary shares) will be issued and outstanding immediately upon the completion of this offering."

     

    "Class B ordinary shares issued and outstanding immediately after the completion of this offering will represent 20.3% of our total issued and outstanding shares and 83.6% of the then total voting power (or 20.1% of our total issued and outstanding shares and 83.4% of the then total voting power if the underwriters exercise their over-allotment option in full)."

     

    I am not seeing any calculation in this information to suggest a $26 billion valuation. Where am I missing something?

     

    When considering other Chinese companies, most calculate their market and enterprise value by ADS......no?
    21 May, 06:17 PM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (758) | Send Message
     
    With a 2:1 ratio, 2.734B ordinary shares is the equivalent of 1.37B ADS. 1.37B x $19 = $26B.
    21 May, 06:34 PM Reply Like
  • James Sands
    , contributor
    Comments (1947) | Send Message
     
    Or I guess we consider that each Class B share is worth two ADSs as well if we divide the total 2,763,756,650 by 2 (1.38 billion ADSs outstanding), and multiply by the $19/share price, then we get the $26 billion valuation.
    21 May, 06:37 PM Reply Like
  • James Sands
    , contributor
    Comments (1947) | Send Message
     
    Thanks Eric, I was having some trouble considering the Class B side of the equation.
    21 May, 06:50 PM Reply Like
  • Clayton Rulli
    , contributor
    Comments (2481) | Send Message
     
    so whats the valuation? what does JD's hint for Alibaba?
    21 May, 10:52 PM Reply Like
  • Clayton Rulli
    , contributor
    Comments (2481) | Send Message
     
    JD priced 2.23x p/s TTM and 1.3x p/s forward. http://bit.ly/SltAk6
    21 May, 11:04 PM Reply Like
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