A Study On Problems Of Chinese Private SMEs Listing On OTCBB

Nowadays Chinese private small and medium-sized enterprises (which will be abbreviated as SMEs in the following) meet the effect of capital bottleneck after developing into certain stage, which becomes the main factor restricting Chinese private SMEs to expand. Going on this premise, this dissertation aims at exploring that the OTCBB (Over the Counter Bulletin Board) is a new approach for Chinese private SMEs to finance. This dissertation covers a systemic piece of research on the necessity and possibility to entering OTCBB, the difficulties Chinese private SMEs face after entering OTCBB and some suggestions for them to do better.In chapter one, the author sketches the current situation of the private SMEs in China. Now in China, the financing of private SMEs more depends on endogenesis, prefers the indirect and informal ways, which causes the difficulty in financing include both exterior and interior factors. Considering these obstacles in China, more and more private SMEs go aboard to finance, especially to the U.S. capital market. Then the author illuminates the necessity to finance in U.S. from two points. One is why finance in U.S., the other is what can Chinese private SMEs get when financing in U.S.Chapter two concentrates on the concept of OTCBB. First of all, the author gives a brief introduction of U.S. security market. The U.S. security market is multi-level, and it consists of exchanges, NASDAQ, OTCBB (Over the Counter Bulletin Board), Pink Sheet and Unsolicited Quote. Whereafter the author explains the OTCBB from its history, its characteristic and its operating. Besides, to make the conception more clearly, the author draws a comparison between OTCBB and NASDAQ.Chapter three analyses the possibility of Chinese private SMEs entering OTCBB. There are mainly four ways for going public in the U.S. market, among which the Reverse Merger plays the most important role. From the author's opinion, listing on OTCBB has four advantages: firstly, it consumes less time and cost, and has lower doorsill; secondly, the U.S. investors have strong interests in investing foreign stocks; thirdly, OTCBB has more advantages than other main boards in the U.S.; the last, it is easier to enter other main boards in the U.S. through OTCBB.Chapter four introduces successful cases of Chinese private SMEs entering OTCBB. The author summarizes the successful cases from 1998, and chooses Sifang as an example to expound the operation of listing on OTCBB through reverse merger. Moreover, the author analyses the reason why Sifang chose OTCBB and the benefits she got from OTCBB.Chapter five explores the difficulties Chinese private SMEs face after entering OTCBB and makes suggestions for improvement. The way to OTCBB for Chinese private SMEs is not a smooth and broad one. A great deal of enterprises made their shares rubbished during the process, for which the haste for trends and unfitted pattern may give reasons. The former one includes enterprises treated OTCBB a sub-board of NASDAQ, confused listing with going public, and equates entering OTCBB with financing successfully. The later one indicates the weakness of Chinese private SMEs themselves. To such problems, the author makes five suggestions.The creativity of this thesis shows from the following two aspects:The first is the topic choosing. The research on Chinese private SMEs entering OTCBB is newly emerged now. The author hopes that this dissertation may offer a new option for Chinese private SMEs financing. The second is the view of research, which concludes in three points:⑴give a complete introduction to OTCBB;⑵indicate that OTCBB is one solution for Chinese private SMEs financing considering their own characters;⑶use a dialectical method to research the OTCBB, quote the frustrated cases to explore the remaining problems, raise a point that not all the Chinese private SMEs could list on the OTCBB successfully and express a disagreement with some domestic negative viewpoints against the OTCBB.