Following strong gains in Hong Kong listed technology stocks this year, leading Chinese web game developer Forgame’s IPO in the territory has raised circa US$206 million, with the company’s shares continuing to rise in early trading.
Forgame’s HK listing attracted many small investors, with shares priced close to the market peak. Forgame’s IPO price was HK$51.00, and the company’s stock opened at HK$61.75 on Thursday, trading as high as HK$69.60.
“People are over-optimistic on this sector,” said Prudential Brokerage associate director Alvin Cheung. “Their thinking and prediction is heavily dependent on the market. When the market is okay, they have an automatic positive opinion on the stock, but they can change their minds very, very quickly.”
Forgame has announced plans use about 60 per cent of the funds raised for game licenses and company acquisitions in China and overseas. Circa 20 per cent will be invested in the company’s online and mobile game operations, with the remaining funds earmarked for overseas expansion and working capital.
