Yandex, which runs Russia's most-popular search engine, plans to offer shares on the Nasdaq exchange at between $24 and $25
The stockmarket frenzy around tech companies looked set to continue after the Russian internet company Yandex raised its price guidance for its planned New York flotation in the wake of LinkedIn's spectacular debut last week.
Yandex, which runs Russia's most-popular search engine, plans to sell shares on the Nasdaq exchange at between $24 and $25 apiece, above an earlier range of $20 to $22, Reuters reported. At the higher price range, Yandex's initial public offering could raise as much as $1.3bn (£800m) to value the company at up to $8bn.
At those prices, Yandex's IPO would be the biggest by an internet company since Google raised $1.7bn in 2004, drawing comparisons with the all conquering search engine and its Chinese rival Baidu, which rocked US markets with a 354% jump on its debut in 2005.
"You look at the positive aspects of being a high quality and profitable company, which Yandex has," said Rick Summer, a technology analyst at Morningstar. "It's a dominant player in the market and clearly is the Google of Russia."
"There have been rumors the IPO was five to 10 times oversubscribed. And on the wave of last week's deals, including LinkedIn, we can expect a fully successful placement," said Konstantin Chernyshev, head of research at Uralsib in Moscow.
LinkedIn shares more than doubled after the company's IPO last week, bringing back memories of frothy valuations that preceded the dot-com bust of a decade ago.
Baidu, China's biggest search engine, has grown into one of the world's top brands since its skyrocketing Nasdaq float in August 2005.
Like Baidu, Yandex offers a way to buy into the fast-growing Internet market in Russia and its neighbours. Yandex fans also highlight the firm's record of profitable growth, driven by online advertising.
Yandex controls 65% of the Russian market for Internet searches, far outpacing global leader Google. Its earnings rose 90% last year to $135m on sales that grew by 43% to $445m.
"It's the biggest Russian Internet play and the online advertising market is growing at a fast pace," said Dmitri Kryukov, chief investment officer at hedge fund Verno Capital.
Investors may be reassured by the fact that the duo who founded Yandex in 1997 – chief executive Arkady Volozh and chief technology Officer Ilya Segalovich – will retain most of their holdings.
The mathematicians developed an algorithm to conduct keyword searches of the Bible that took account of the Russian language's complex case endings, refining it into the search engine that was used by 38 million unique users in March.
The two invented the name "Yandex" – with "Ya" standing for the Russian equivalent to English pronoun "I" – as Segalovich was experimenting with derivatives of words that described the essence of the technology. The full name originally stood for "Yet Another iNDEX."