Institutional Investor (August Issue)
“Facing an image problem,” many Chinese companies are retreating from U.S. exchanges. “Frustrated by low valuations and investor skepticism, Chinese companies are increasingly considering delisting from U.S. stock exchanges.” Since 2009, 24 Chinese companies have delisted, often going private, from the NYSE and Nasdaq. Much investor skepticism is directed at companies that utilized reverse mergers to attain their listing, thereby avoiding the scrutiny that would accompany a normal IPO, but the skepticism has tainted even Chinese companies with solid financials.
Tags: China, Companies, Delisting, Image, Investors, IPO, Listing, Nasdaq, NYSE, Private, Reverse mergers, Scrutiny, Skepticism, Stock exchanges, U.S., Valuations
Financial Times (July 26)
“Made in China, undone in America.” Chinese firms that list in the U.S., often through reverse mergers, have seen their popularity drop and shares slump as questions arise over the propriety of their books. Some of the world’s most respected investors, including John Paulson, have taken their lumps. As of July 20, the shares of four of these firms were trading at less than half the price they were initially sold to US investors. Meanwhile, one of the stocks had been de-listed from Nasdaq and all eight were trading far below their one-time highs.” This trend has raised questions about whether reporting and regulation in China fall short of international standards.
Tags: China, Financial reporting, Nasdaq, Regulation, Reverse mergers, U.S.
