Pentagon scraps huge cloud contract in blow to Microsoft Will the next Alibaba or Didi choose New York? Stay tuned. It said securities fraud was prominent in overseas markets. The government said it will severely punish illegal securities activities, including fraudulent share issuance, embezzlement and market manipulation. On Tuesday, China said it would increase regulation of overseas-listed companies, heaping additional pressure on Didi. It was the biggest US IPO by a Chinese company since Alibaba’s debut in 2014.Įnd of an era? Pressure is not just coming from the United States. According to Jefferies, 10 Chinese companies completed US IPOs in 2020, representing over 20% of the market excluding SPACs - the highest percentage of US IPO issuance since 2010.ĭidi was a continuation of that trend. ![]() Hong Kong has tried to steal business from New York in recent years, encouraging Chinese companies to sell shares in the city in what have been dubbed “homecoming listings.”īut the pull of New York is strong. And US exchanges accept a wider range of valuation methodologies. The big question: Given the political backdrop, why do Chinese companies continue to pursue US listings?Īnalysts say there are several advantages to listing in New York:įor Chinese tech companies, a US listing is even more attractive because American investors are used to dealing with startups. President Joe Biden has followed the same path, expanding restrictions on US investment into Chinese companies with suspected military ties. That forced US exchanges to delist several Chinese companies, including China Mobile, China Telecom and China Unicom. ![]() Former President Donald Trump signed a law in November that bans Americans from investing in firms that the US government suspects are either owned or controlled by the Chinese military. The political atmosphere around listings of US companies has been charged for months. “That puts the investments of American retirees at risk and funnels desperately needed US dollars into Beijing.” ![]() “Even if the stock rebounds, American investors still have no insight into the company’s financial strength because the Chinese Communist party block US regulators from reviewing the books,” Rubio told the UK newspaper.
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