(Update 07Mar07) I saw an updated F1 prospectus at SEC web site. So I would assume the IPO is still on?
Just heard from a friend in the States, this is not offical, but the rumor is the IPO is called off. I assume the reason is the recent sell off of Chinese stocks inside and outside China scared lots of potential foreign buyers.
IPO is a very interesting game for issuing companies, underwriters and buying institutions. Companies do the road show and get people excited. They also talked to underwriter to determine the issuing prices. The underwriters bought all these shares from companies at the issuing price and sell those shares to institutions (a.k.a, their buddies). They receive a fee from this transaction.
IPO price is not a science. Besides the fundamental, it could be affected by market sentiment. For instance, when Google and MasterCard went IPO, the market was not doing very well, thus the IPO price of those stocks were not high. Both those stocks did well afterwards because they delivered good results after IPO, consistently. In other words, they left some money on the table. But this is not necessarily a bad thing. I remember Google did a secondary offering later and pulled in more money. That’s one reason they can spend relentless on Google Checkout promotion. They got deep pockets.
I will update Xinhua Finance IPO when I have any offical news.