This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Chinese Chip IPOs Hitting a Brick Wall

Baidu's (BIDU) spectacular August IPO may have put some glitter on China's emerging tech industry. But when it comes to offerings for Chinese chip companies, investors are less enthused.

Actions Semiconductor (ACTS), a Chinese chipmaker for MP3 players, made its Wall Street debut Wednesday and received a decidedly frosty reception. After postponing its IPO date and lowering its offering price, Actions Semi went public at $8 a share and closed at the same price, with its stock never budging higher than $8.25.

Vimicro International (VIMC), another fabless semiconductor maker from China, had its own IPO two weeks earlier with even worse results -- shares opened at $10 and immediately headed south. At Thursday's market close they stood at $8.51.

This lackluster performance is in sharp contrast to some of the companies' compatriots. Overall, Chinese companies have fared well in U.S. public offerings. The average gain of Chinese IPOs dating back to 2003 is 41%, says John Fitzgibbon, an analyst with IPODesktop.

But this rising tide has eluded Chinese semiconductor companies. "Obviously the tape is telling you the investors aren't buying into it," says Fitzgibbon, whose firm has no banking relationship with the companies mentioned in this story.

A combination of limited track records -- Actions Semi and Vimicro began operations in 2001 and 1999, respectively -- and concerns over intellectual property and accounting practices in China may be giving investors cold feet, say some analysts.

And the chip companies simply may have had the misfortune of tapping the public markets at a time when semiconductor companies are not in demand.

"These companies may be performing well relative to the industry, but the industry does not have the attention of Wall Street right now," says Bill Tai, a partner at venture capital firm Charles River Ventures.

Tai points to Beijing-based Semiconductor International Manufacturing (SMI), a bellwether of Chinese semiconductor companies, whose stock is down roughly 50% since March 2004.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs