NEW YORK ( TheStreet) -- Tudou decided to push forward with its IPO amid a brutally volatile stock market. But the first day of trading for the "You Tube of China" is showing that its timing may not have been so good.

Shares of Tudou, whose American depositary receipts trade under the symbol TUDO on the Nasdaq, were down 7% to $27.10 shortly before 11:30 a.m. ET Wednesday.

Tudou has touted its increasing number of unique users, which jumped from 50 million in December 2007 to 182 million in December 2010.

The company provides advertising services, mobile video services and owns one model patent relating to a search engine. But it has never turned a profit. Revenue has been climbing, but the company lost $56 million in 2010, and for the first three months in 2011, lost $26 million.

Online video is capital-intensive, and it could be that Tudou will eventually make money. The company is up against big competitors like Youku ( YOKU) and 56.com, but not YouTube, which isn't accessible by Chinese viewers. Tudou is using the proceeds to fund expansion of Internet bandwidth capacity, content procurement and in-house content production.

"Companies that want to go public in this "brave new world" will face increased scrutiny, and they'll have to be ready - starting with an infrastructure that shows they're prepared to take their business to the next level," said Steve Hobbs, managing director at Protiviti. He believes that investors and venture capital funds are kicking the tires a lot harder to make sure that potential IPOs are on solid ground and really ready to go public.

The recent volatility in the stock market has not been kind to the IPO market. Only two companies took the plunge into the public arena during last week's roller-coaster ride, with surprisingly good results.

Carbonite ( CARB) and SandRidge Permian ( PER) both lowered their expectations on their deals, which may be the reason the market accepted them so well. Carbonite is up 4% over just a few days. SandRidge Permian initially tumbled, but now the stock is now above its offering price of $18.

--Written by Debra Borchardt in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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