low-ipo-price-gives-gushan-support-on-debut

Low IPO price gives Gushan support on debut

The Chinese biodiesel producer sets the price of its US offering 16.5% below the initial range as investors become more valuation sensitive.
ChinaÆs largest biodiesel producer Gushan Environmental Energy has completed its initial public offering in the US, but had to back down on the price to get it out the door. The deal was offered at a price between $11.50 and $13.50, but in light of the current weak market and an increasing reluctance among investors to add to their exposure this close to year end, the final price was set at $9.60. Sources say investors are also becoming very sensitive about valuations.

This resulted in a total deal size of $172.8 million û of which the company itself pocketed $144 million. While this was close to 29% less than the maximum it had initially...
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