14 DAY TRIAL // There is a lot of interest in tech companies these days and the initial public offer of Russia's dominant search engine Yandex is yet another indication, after LinkedIn's great start last week. Yandex stock surged 55 percent from the opening price.
Yandex, which gets more than 60 percent of the searches in Russia, has been looking to go public since 2008, but the global economy put plans on hold..
Now, amidst a favorable market for internet companies, Yandex got off to a great start on the Nasdaq market. Share prices closed at $38.84 after the first day of trading, up from a starting price of $25.
LinkedIn, the professional social network that debuted on the public market as well less than a week ago, doubled its share price in the first day, but it lead to analysts saying this just proves that the company's shares were undervalued.
Yandex raised $1.3 billion in the IPO, though it doesn't have any definite plans for the money yet. The company just wants a cash reserve to make sure that it can tackle any problem and also make a move when needed.
Yandex had the biggest IPO for an internet company since Google in 2004. Google gets about 22 percent of searches in Russia and is Yandex's closest competitor. Russia is one of the very few countries where Google doesn't lead in the search market.
With shares trading at about $39, Yandex is worth almost $12.5 billion. Yandex shares started trading at a valuation of about $8 billion. The company reported revenue of $440 million in 2010, with profits of $134 million. Revenue grew 43 percent in the last year and should continue to grow at a brisk pace, but the company is still going to be considered overvalued by many.