An Analysis Of The Factors Affecting The Delisting Of US-listed China-concept Stock

The US-listed China-concept stocks are pioneers of Chinese companies in participating international competition and in seeking development out of China.With the vigorous development of Chinese Internet industry in 2007,a group of high-tech internet companies from china landed on the Nasdaq stock market,triggering a surge in the amount of US-listed Chinese companies,in this way the competition becomes fierce then.In addition,more Chinese companies with concept of emerging technology such as new energy,new materials tech,biotechnology and so on,joining in the group US-listed Chinese companies.Due to the difference in information disclosure requirements and regulatory disciplines between China and the US stock markets,the listed Chinese companies have been sued by the SEC and American institutional investors frequently since 2010.For the quality of listed Chinese companies varied,some US-listed Chinese companies was delisted by stock market,others search for privatization under the pressure of price devaluation.It eventually goes into an overwhelming wave of shorting US-listed China-concept stocks,and the market disputing on US-listed China-concept was fierce.Chinese companies with good performance in business can ' t be able to tolerate the long-time devaluation of stock price they actively call for privatization and delisting from the market.Some others which are in fact underperform goes in to worse condition and they suffered setbacks then,making them more difficult in financing and be forced to delist from the market.In 2011 alone,the number of US-listed China-concept companies delisted from the U.S.marker is amount to 20,which equals to the total number of delisting US-listed China-concept companies in past 20 years.The crisis of confidence in China-concept stocks affect all the Chinese companies listed in America despite some are performing well in the business.According to the SEC documents on the class action to Chinese companies,the main issue is the information disclosure,complex ownership structure,complicated and unclear business mode.Go step further,once the US-listed China-concept stock has became target of short-sellers in America,every actions adopted by companies will be maliciously viewed.What is the problem ofChinese companies listed in America?This paper adopts descriptive statistical analysis and Logit model to empirically studies the characteristics of US-listed Chinese companies in different times,and basing on the reasonable assumptions of delisting theory.Exploring the companies operational factors and environmental factors affecting companies delisting decisions,to determine which is the real cause of the delisting crisis.At the end of the paper,the author suggests that Chinese companies should be thoughtful before going into the U.S.stock market,they should consult qualified and credible intermediaries in advance and get access to information about stock market from multiple aspects.They should consider the feasibility based on their real conditions rather than left to chance.Drawing lessons from the delisting of US-listed China-concept Stock is important for Chinese capital market.In particular,to construct multi-level capital market and advance the registration system,in this way,to encourage Chinese companies to list in domestic capital market.For investors,they should invest more rationally,and avoid being misled by the market.Stay optimistic to US-listed China-concept Stock even after the delisting crisis,because they are still high quality with a promising future outlook.