The door is closing on Chinese tech IPOs on Wall Street | CNN Business
July 22, 2021. Summarized by summa-bot.
Compression ratio: 17.8%. 1 min read.
Tough US laws requiring audits for foreign companies. A growing crackdown by Beijing that threatens to touch every part of the Chinese tech industry. A botched public offering by one of China's most prominent tech firms.
Things are looking pretty dire for Chinese tech right now, especially firms that have been considering overseas listings as a way to raise money.
China’s unprecedented tech crackdown has wiped $1 trillion off the value of overseas-listed Chinese tech stocks since February — one of the worst sell-offs in history, Goldman Sachs analysts said in a research report last week.
And since shares in Didi crashed this month after its IPO in New York — a result of the massive scrutiny the ride-hailing company has faced from Chinese regulators and American lawmakers — a wave of other Chinese firms have reportedly backed off of plans to go public in the United States.
More recently, Bloomberg reported that on-demand delivery app Lalamove is thinking about shifting plans for a $1 billion US IPO to Hong Kong as Chinese regulators clamp down on overseas listings.
It “may very well be” the end — at least temporarily — to US listings for Chinese companies, according to Doug Guthrie, a professor and director of China Initiatives at Arizona State University’s Thunderbird School of Global Management.
US listings have long been an important way for Chinese companies to raise foreign capital.
So far this year, 37 Chinese companies have listed in the United States, raising a combined $12. 6 billion, according to Dealogic.