Reuters announced recently that Nasdaq pauses around four Chinese companies IPO preparations. This is because the firm is still investigating the short-lived stock rallies of small firms following their debuts. Lawyers and bankers working on the stock launches have confirmed this. The stock exchange operator responds following the surge in the shares of Chinese companies that raise small amounts for as much as $50m or less from IPO. But on their debuts, these stocks could escalate for around 2,000%. They only nosedive in these days the bruised investors speculating penny stocks.
A securities attorney at Ellenoff Grossman & Schole, Douglas Ellenoff argued that Nasdaq informed him about certain IPO pauses that would not proceed. They would wait for the investigation. Ellenoff argued that he received last-minute phone calls, leaving him thinking they would go somewhere with the deals. In the middle of September this year, Nasdaq asked the advisers from small Chinese IPO candidates. The questions delivered were about the identity of the existing shareholders, total investment and many more. Nasdaq also asked about the interest-free debt in order to participate. This is according to Dan McClory, one of the bankers, at Boustead Securities.
However, the four halted Chinese companies are not to be published, according to the lawyers and bankers. It is also quite uncertain what will happen if Nasdaq has completed the investigation. There is no information about whether or not the four companies would continue. Nasdaq refused to comment. Furthermore, around seven sources working on the small Chinese firms IPO told Reuters that neither they nor their clients be identified.