China Digital A Big Hit on NYSE

Filed in archive Internet on October 8, 2007

We talked a few weeks ago about little known China Digital TV (NYSE: STV) and how they planned to float an IPO on the New York Stock Exchange. Well boy did it float!

In looking at the stock's debut performance, Tom Taulli said, "it was inevitable it would do well" based simply on the heat being generated by tech stocks as a group.




Few people had heard of the company when China digital tv first filed with the Securities and Exchange Commission last month. We've since learned that they have a 44% market share in China's growing digital smart card industry. The Chinese government wants all TV in China to be digital by 2015.

The IPO price for China Digital was a sweet $16 a share. The stock opened at over twice that on Friday - $37.50 a share - and closed down at just over $29 a share. That's an increase in value at the close of over 80% on the IPO price. So IPO investors made a killing.

When the news of the listing came out, I agreed with Amy in Hong Kong, who said: "I would say it's risky to invest in China's digital TV market now, especially in a digital TV card maker like China Digital TV, since the policy of standard and regulation hasn't really confirmed yet and it could be changed anytime." From the standpoint of speculation on the IPO, I was obviously wrong. And judging from the growing demand government regulation in China is going to create for China Digital's products, this is now a stock to watch...