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Chinese Mobile Gaming Company CMGE Planning Spin-off on NASDAQ Sept. 25th

While the Chinese tech scene continues to grow at a rapid clip, investor interest has been rather lukewarm this year. Still, many companies continue to hold aspirations for a turnaround and one company in particular, top mobile game company CMGE (China Mobile Games and Entertainment Group) and subsidiary of VODone, is planning to IPO on the NASDAQ beginning Sept. 25th. They are also doing it a bit differently than others.

Public offerings have been the primary way for Chinese tech companies to seek new financing abroad in recent years, and the NASDAQ looms large among their most coveted listings. Yet despite this enthusiasm, Chinese companies have received a tepid response from investors this year, as last years accounting scandals have contributed to an overall cooling of investment climate for Chinese IPOs. The market saw 30 Chinese IPOs in 2010 and 10 in 2011 on the NASDAQ. This year it has seen only one thus far.

Nevertheless, some companies are still positive about their prospects. CMGE has been eying the NASDAQ for almost two years now, says CFO Zhang Fei-Hu. Describing his company to reporters as a TMT company (technology, media, and telecommunications), CMGE hopes to raise more awareness on the one hand, and gain financing through the capital markets on the other. Additionally, the company will be providing financial options for their management and staff.

Instead of using a backdoor shell method of going to market, CMGE is taking a more cautious and legitimate route by “Way of Introduction” on the NASDAQ. In this case, VODone (HKG:0082)–China’s third-largest news portal website–will be spinning off approximately 6.7% of its shares in CMGE to investors. Zhang Fei-Hu explained, “Even though this listing does not have initial financing, we hope that CMGE will start to get some funds within 6 months or a year.” He says this will help the company in its recruiting efforts to attract more engineers and a game developer team.

Conditional upon CMGE’s successful opening, dividends will be distributed for every 2000 shares of VODone. Here’s wishing them the best of luck.

Source: Netease 

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