US Listed Chinese Firms Hit Slump as Shares Went Down
Chinese firms that are listed in the United States recently hit a slump as shares went down with plans to go private and relist domestically might be tougher to deliver. Internet services provider Qihoo 360 Technology, dating app Momo Inc and social platform YY Inc sank more than ten percent with rumors that China securities watchdog is planning stricter rules on US traded companies return to A-shares market.
China Securities Regulatory Commission said that its placing closer eye on reverse mergers, which a previously fast track for firms are resorting to land on home markets by putting their assets to an acquired shell company. Latest expectations are regulators will require overseas delisted companies to wait a year before looking into A-share backdoor listing. Sources also said that securities watchdog might set a ceiling on price to earnings ratio or restrict assets that companies can enter the listed entity. Data center services provider 21Vianet Group Inc took a plunge of 24 percent, its biggest decrease since it announced its delisting plan last June.
Baidu went down for a third day, as regulators demanded that the search engine giant to do an overhaul in its healthcare advertisements display as they were accused of providing misleading information on medical treatments. JD.com the second biggest e-commerce site also tumbled by 7 percent after reporting a less than expected results as the net loss attributed to ordinary share holders went up by 28 percent or 909 million for the first quarter of 2016.