Chinese internet stock
It is very important for us to first understand what is meant by Chinese Internet Stocks. The Chinese Internet stock refers to the stock of various Internet based Internet companies based at China. These stocks are traded like stocks of other companies and in fact, these companies are now being listed at overseas markets also. In the recent times, there are many companies based in China that are listed overseas like at NASDAQ in United States. However, getting listed and proper investor base is not a very easy task. Let us discuss the recent listing of Chinese Internet stocks overseas.
liSTING OF CHINESE INTERNET COMPANIES OVERSEAS
There are many China based companies that are getting listed overseas in order to accumulate more funds and international recognition. The question that arises here is that does these companies would make a great impact i.e. would get proper investor base, is still questioned. For example, some days back, China based Internet. But the debut made on Friday was quite poor. The company did not get the response as was required. This poor listing has of course send shudders throughout the Chinese internet market, especially among the various entrepreneurs that wish to get their companies listed overseas. It is very important to note here that for most of the internet companies based in China, getting successfully listed overseas is also a hope of survival, as these companies are finding it very difficult to make profit and get listed at the domestic stock market. The Chinese company mentioned above opened at the price of $15.50 and the American depository receipts of the company rise to a moderate level and then dropped, finally closing at $12.125, which was not at all good. The total drop pertaining to the China based Internet company was about 22%. So, it has to be made very clear here that NASDAQ listing is not at all easy. This is of course a message for all the other Chinese internet companies that listings are tough and extraordinary results or performance can get them the price they want. Thus, a person can easily carry out an analysis of listing of Chinese companies and the Chinese Internet Stock. Let us discuss these observations next.
ANALYSIS AND CHANCES OF CHINEST INTERNET STOCK
Example of the Chinese company mentioned above has forced experts in China to make analysis and find out the reasons for the bad listing of companies overseas. It is to be understood here that in China, many young people are going for the internet business and have started their own companies. Most of these people think that they would be able to get their company listed at NASDAQ and other overseas markets so that they can also develop in the same way as many of American companies have developed by bolstering finance by listing at NASDAQ. But getting this listing at any of U.S exchanges is not a very easy task. It is also important to note here that hundreds of million of dollars have entered in the form of foreign venture but the results have not been enthusiastic at all. No doubt, the days when the Chinese Internet concept can be taken and the same can be sold easily at NASDAQ have gone. This is opinion of Michael Brownrigg, who is associated with Chinavest, the venture capital firm that is based in United States in San Francisco.
There are strong fears among the various Internet Entrepreneurs of China. This is because up to now, the Chinese Internet stocks have hold good values in the overseas market even during the slow down of overseas market. Now, these Chinese Internet stocks are completely scrutinized and there are many loopholes found for which investor do not like to block its money. There is a clear cut message from the listing of Netease.com that various investors in United States do not invest in Chinese Internet companies without any fundamental check, as they have been doing in the past. Many China based Internet companies have been listed in the past and got successful support also, which helped them to expand their operations worldwide. But that era is over. It is quite interesting to note here that the Chinese Internet company Netease had to strip out its capital assets to win the Chinese government approval for getting listed overseas at NASDAQ.
Now, the company is facing strong financial crunch, due to which the further expansion plans of the company have suffered a great set back. The web site of Netease company is owned by various private investors including the founder of the company Ding Lei, who has lately resigned from the company. This is of course a sad fate that is met by the company. There is also one more aspect that need to be understood regarding the Chinese government regulations and Internet company entrepreneurs. There are many Chinese entrepreneurs that are very much angry with the Chinese government regulators regarding the various rules concerning the ownership of stake in the company by foreigners, especially in the Chinese Internet Companies. These rules have also played an important role in slowing down of listing procedures abroad. It is also quite important to note here that few months back, several Chinese Internet companies were ready to get listed at overseas including NASDAQ, but the government in China might not allow these companies to do so after seeing the fate of Netease in the United States. Thus, the entrepreneurs of Chinese Internet companies have to find other pastures for getting the required funds. A person should also note that the Chinese government does not allow a company to get listed even at the domestic markets if it is not earning profit and for such companies, getting listed at the foreign market would remain a dream only.
THUS, ITS TOUGH TIME FOR CHINESE INTERNET STOCKS
After going through the above discussion, it can be easily said that the coming time is very tough for the various Chinese internet companies that wishes to get listed overseas. Even the profitless companies in China are not allowed to float their shares in the domestic markets.
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