As expected, the "Google of Russia" debuted on the Nasdaq yesterday with great success. Shares soared more than 55 percent, starting with an IPO price of $25 and closing at $38.84. For Yandex, a company far from a household name in the U.S., the IPO was a triumph. For investors still bruised from the dot-com bubble that burst a decade ago, the stock market frenzy of recent weeks may bring back feelings of unease.
Yandex holds a majority of Russia’s search engine market, and its IPO was the largest of its kind in the U.S. since Google’s famous record-breaker in 2004. However, the strong stats behind the search engine must also be considered in light of the risks of doing business in the regulatory labyrinth that is Russia. In this regard, investors hope the deal will bear a resemblance to Baidu’s IPO in 2005. The Chinese search engine has managed to hold on to its massive initial success, now trading at around $130 in comparison to its IPO price of $27.
Despite market optimism, a bubble could be forming, as Renren (the Facebook of China), LinkedIn, and now Yandex claim success on Wall Street. Up next to try and get its piece of the speculative pie is Zynga. The online gaming company is expected to file with regulators as early as this week, pricing itself at more than $10 billion.