Posted on 08/14/2012 1:16:32 PM PDT by Lorianne
Chinese firms leave US stock markets amid complaints about price, accounting scrutiny __ Just a few years after Chinese companies lined up to sell shares on Wall Street, a growing number are reversing course and pulling out of U.S. exchanges.
This week, Focus Media Holding Ltd., announced its chairman and private equity firms want to buy back its U.S.-traded shares and take the Shanghai-based advertising company private. The deal would value Focus Media at $3.5 billion, according to financial information firm Dealogic.
Smaller companies also are withdrawing from U.S. exchanges. In a sign of official encouragement, a Chinese business magazine said a state bank has provided $1 billion in loans to help companies with listings abroad move them to domestic exchanges.
The withdrawals follow accusations of improper accounting by some companies and a deadlock between Beijing and Washington over whether U.S. regulators can oversee their China-based auditors.
(Excerpt) Read more at finance.yahoo.com ...
The Chinese are worried about American acounting practices? I’d be a lot more worried about Chinese accountnig practices.
Wouldn’t be the first time someone has suspected a rigged house and left the casino. Maybe zero can entice them back with launch codes and a few rounds of drinks.
Bingo!
That seems to be it. US regulations require certain accounting standards to be met if you are going to be selling your stock on a public exchange here. The Chinese seem to fear that they can’t (or possibly that an Obama administration might scapegoat them in a borderline situation). And so they’re buying their own stock back.
Couple of things:
SOX, Frank-Dodd and Chinese attempting to set themselves up as the premier business environment.
Quite a few of these Chinese companies were actually scams.
Couple of things:
SOX, Frank-Dodd and Chinese attempting to set themselves up as the premier business environment.
I find the comments interesting here that jump to the conclusion that the chinese are just miffed because they can’t cook the books themselves, when daily we hear news of some other business scam in this country, billions skimmed here, billions “lost” there. The chinese are a lot of things, but stupid ain’t one of them. Maybe they did find corruption and book-cooking.
Anyone consider that these companies came public on the US exchanges so they could get a much better price for their shares via the IPO. The US investors have a lot more investable money and US brokerage firms will place deals, no matter what the quility of the deal (remember FaceBooks recent IPO?).
Then with these new riches, let the share price decline and then use the money from the IPO to buy back shares and take it private.
Basically, they “used” the US stock market to make zillions that they couldn’t have made in their own markets and can now use these riches to take them private and keep the money they raised.
Diabolical perhaps, but it is clever.
I agree...stupid is not one of their traits. And it isn’t just the Chinese companies pulling their assets (and their risks) out of the US market since Obama came into office.
I believe the champsion is the CEO who sold a large amount of stock in his company on the NYSE, then transferred all the assets of the company to himself and decamped for Singapore. It was legal under Chinese law.
And the Wall Street yawned and said “So what” today.
You said it...The ChiCom’s are NOT playing on the level.
They’ll pull out of treasuries and other bonds much faster, when the time comes.
The Dow’s just a hair up a minute or so ago—very nearly no change from opening. I doubt the Chinese are going to hike our unnatural, global dollar. ;-)
When I think China, I think Muddy Waters.
“Quite a few of these Chinese companies were actually scams.:
I’m inclined to agree with you. Eighteen of the 30 Asian private equity firms that have gone under in the first two quarters of 2012 are yuan-based and supported by the Chinese government.
The ChiComms are going to pay a price for selling me bolts and screws that are not properly annealed. You have no idea how frustrated I get when the bloody head of a ChiComm bolt snaps off while I’m torqueing it.
My frustration, though, is a blessing for the US Navy. When the navy wants to track ChiComm warships, it only needs to follow the popped rivets floating on the water. That saves money on expensive radar.
Remember the big hoopla about the ChiComm aircraft carrier? My sources tell me that 25 of of the 30 Wong Wei squadron pilots who tried to land on the deck hit below the waterline. The other five hit various parts of the ship, including the flagpole in the center of the deck, and that set the carrier on fire.
I think my sources are correct because nobody has seen the carrier for six months. It’s probably being repaired in the Gobi desert so it doesn’t sink again. The odds are 50-50 that it gets blown away by a sandstorm and ends up under the control of the Mahayana Buddhist sect in Lhasa, Tibet.
In the last two years, Chinese companies bought up failing small cap listed companies here. It is a technique to avoid the costs of doing an IPO. Then they would rename the company to "China something", figuring every American wanted to get on the ground floor of a Chinese company. The stocks would gyrate around, and eventually crash, because the companies were basically worthless phantom companies, like a lot of the dot com companies. So they are mostly gone now, and traders are the wiser. People lost a lot of money on them.
Maybe there is legitimate concern by legitimate Chinese companies, but I think it is more just the end of this scam.
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