The Chinese online literature platform Cloudary has withdrawn its two-year-old US IPO offering due to “market conditions”.
Cloudary filed for a listing in the US in May 2011. At the time the deal was thought to be worth up to $200 million (£132 million). The firm initially enlisted BofA Merrill Lynch and Goldman Sachs as underwriters. It then replaced them with Bank of America, Citic Securities and CICC HK Securities.
Cloudary said in a filing, "In light of current capital market conditions the company has elected not to proceed with the offering of securities contemplated in the registration statement at this time."
Just a week ago the company raised $110 million (£73 million) in a further funding move, but that transaction valued Cloudary at much lower than previous valuation estimates.
Goldman Sachs and Singapore investment company Temasek Holdings took undisclosed stakes. But the deal is reported to have valued Cloudary at $600 million (£397 million), some 25 per cent lower than the $800 million (£530 million) the company was valued at after equity firm Orbis paid $15 million (£9.9 million) for a 1.9 per cent stake in May last year.
Cloudary, founded in 2004, is a subsidiary of Shanda, one of China’s biggest Internet companies. It owns six original literature websites.
While Cloudary has decided not to list in the US, other notable Chinese Internet companies have already successfully managed to do it in the recent past.
Among these are Baidu, Tencent and Sina. However, the mother of Chinese US IPOs is still waiting to happen. China's e-commerce giant Alibaba's has a much-anticipated US IPO in the pipleline, which could happen before the end of the year, according to reports. And if that goes ahead it is expected to raise up to $70 billion (£46 billion), according to market estimates.