Shares of entertainment portal Stareastnet.com rose 5.9% in their first day of trading, bucking the recent trend for new issues on Hong Kong's Growth Enterprise Market. The company is betting its roster of 150 celebrities will keep gossip-hungry Chinese consumers flocking to its site. It seems investors agree.
Stareastnet's shares rose to HK$1.25 from their offer price of HK$1.18. The company sold 170 million shares to raise HK$200.6 million ($25.7 million) to help finance the development of new content and additional technology. The gain came even as the tech-heavy US Nasdaq fell 1.7%.
Stareastnet offers entertainment news, live chat with its contracted celebrities and movie clips as well as restaurant, horseracing and other lifestyle information. The company eventually plans to offer online ticketing, shopping, auctions and fan clubs.
Since its inception in February 1999 through February 2000, the company lost HK$55.9 million. For the month ended March 31 it lost about HK$24 million. And it expects to continue losing money as it develops content and increases the fees it pays to its celebrities, whose web sites it hosts.