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Chinese e-tail IPO pops in slow pre-holiday trading

Written By | May 22, 2014

WASHINGTON, May 22, 2013 – Priced last night at $19 per share—a dollar above its earlier range—Chinese e-retailer (new symbol: JD) popped in its opening trade late this morning and is currently bid at about $21 per share. That’s roughly a 10 percent gain if it holds.

The Maven got lucky and snagged a small amount of shares on the offer, although he’ll have to see just how long this plus move will hold. New buyers will likely flip out early to marshal cash for the sure-to-be-vastly-oversubscribed IPO of much-larger Chinese e-retailer Alibaba. That IPO has been filed, but it’s anyone’s guess when the SEC will be done looking at the offer or when it will actually come to market. We suspect June or July.

IPOs haven’t done all that well lately for us or anyone, except for ZenDesk (ZEN), which is still up a good 85+% higher than its offer. TrueCar (TRUE), however, while up initially from its offering price, is now close to flatlining, as underwriter support seems to be drifting off.

We thought that TRUE—a deeply-embedded and highly useful car-buying software package-database that serves as the chassis of several name-brand car-buying services—would at least attract some interest, but maybe not.

Fact is, like so many IPOs these days, none of these companies—ZEN, TRUE, JD and numerous others—seem to make any actual profits. At the same time, some of their CEOs make outlandish salaries that would even embarrass most Wall Street bankers. It doesn’t seem to compute. That’s why the IPO market has recently been off-putting, particularly in the tech area, which is also correcting in open trading action.

Nonetheless, you still get some pops, so we try to gauge them, winning more than we lose, but not all.

The market itself is still above water by about 14 Dow points, 5-ish Standard & Poor points and 22.5 NASDAQ points as of about noon today. Trading, however, is deceptive, as it’s slowing to a crawl prior to the early-arriving Memorial Day holiday as we move into the slow summer trading season. Sell-in-May could also be operational here, but you never know.

Tomorrow’s Friday trading should be even more anemic as the East Coast 1% head for their palatial mansions in the Hamptons and Silicon Valley 1% (tech CEOs) exit stage left for sand, surf, a bong hit or two, or maybe an extended Sonoma Valley or Napa Valley wine excursion.

As for the rest of us who have to work, here’s Wall Street’s Memorial Day holiday trading schedule:

Monday, May 26, 2014: All US markets—stocks, options, fixed income—will be closed in observance of the Memorial Day holiday. No pre-market or after hours trading will take place.

Bond Trading: Closes early at 2 p.m. EDT, Friday, May 23, 2014. Fixed income orders placed after 2 p.m. EDT on Friday will be entered on the next business day, which is Tuesday, May 27, 2014.

Canadian Markets: Open on May 26, but check with your broker for details on routing of trades and settlement dates.

Foreign Markets: Check with your broker for details.

Trade Settlement Dates: Remember, since May 26 is a Federal holiday, it doesn’t count as a regular business day, so take that into account when determining when trading funds are settled.

Today’s Trading Tips:

None, aside from a little portfolio smoothing if necessary. We intend to start enjoying the weekend early. Unless something of major import comes up, we likely won’t return until Tuesday, May 27.

Until then, enjoy a happy and safe Memorial Day weekend.

Terry Ponick

Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Senior Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17