Chinese online peer-to-peer firm Yirendai launched its IPO on the New York Stock Exchange last week, potentially paving the way for other Chinese firms.
Yirendai was one of the last companies to go public in the US this year, but is following the footsteps of a few other Chinese companies.
Companies from China have been wary to launch in the US, instead preferring the more local Hong Kong Stock Exchange for funding and favorability. But the launching of Yirendai may encourage more Chinese companies to go public in the US.
Last year, Chinese e-commerce giant Alibaba went public in New York, recording the largest IPO of all time at $25 billion.
Although companies like Alibaba chose to list in the US, other Chinese firms have run into a few roadblocks. The IPO of Yirendai represents the internationality and global connectivity of financial technology companies. Previously Chinese companies failed to receive adequate attention from US investors. But up to 80 percent of Yirendai’s IPO investors came from the US.
The firm initially offered 7.5 million shares at $10 per share, but ultimately ended the day down 9 percent. Part of the reason for the falling share price may be due to the lack of attention from investors at the end of the year. Regardless, Yirendai was valued at $300 million earlier this year, and with time its stock price may reflect this estimation.
The primary draw of US stock exchanges is the large amount of investors and capital available. If other Chinese companies decide to list in the US, more IPOs like Yirendai will need to gain more attention to rally the interest of Chinese firms.