The latest turmoil in China’s stock market has left more than 20 Chinese technology firms in cold. A few weeks ago, these Chinese internet firms listed in the U.S. delisted themselves in the hope of relisting in China for higher valuations. With the Chinese government rolling out emergency measures to prevent stock market crash, the State Council headed by Premier Li Keqiang, has decided to suspend the new listings until the market gets stabilized. This decision has left the Chinese firms to go nowhere after delisting from Wall Street.
The Chinese internet firms were getting encouraged by the regulators in China to get listed in Beijing in order to promote the government’s “Internet Plus” strategy. No one had then envisioned the present turmoil in the Chinese stock market. The regulators were welcoming the internet firms to boost the image of the Chinese economy which has been in its worst shape lately. Relisting in China for these internet business owners would have doubled the valuation of the companies. The Chinese benchmark index registered gain over 130% from the start of the year till early June before crashing. The lure of getting listed on ChiNext market with double or triple valuation drove these internet firms from delisting in New York stock exchange. The internet owners preferred to get listed on Chinese benchmark index than to face low valuations and inactive trading on Wall Street.
Now, the companies are thinking to get listed in Hong Kong as China has stalled the listing of the companies. However, it is still not confirmed whether the regulators in Hong Kong would welcome these internet firms.