Nasdaq wants Chinese companies to pay $ 25 million for the US IPO

Beijing – NASDAQ stock exchange plans to make it more complicated for small Chinese companies in New York, after the flooding of tiny public proposals.

As part of the proposed changes in the company that work mainly in China will be Need to pay at least $ 25 million Of their public proposals, Nasdaq said at the end of Wednesday local time.

This step happens as tensions between the US and China cooks, and as NASDAQ faces wider financial market issues.

“It will be more difficult for small Chinese companies to go IPO (on) NASDAQ according to the new rule,” said Winston MA, Professor of the New York New York Law School. “The new rule responds to some cases of IPO” pumps and landfill “from the small size of the float”.

The US had some great Chinese IPO Settings around Didi’s Company Company New York List in 2021. But in 2024, 35 small Chinese companies based in China were included in New York, about 17 microcaps in the United States, said in December.

Microcasses usually refer to the shares with market capitalization from $ 50 to $ 300 million, which means that the companies have collected only a few million in the original public proposals. A fee of $ 25 million will destroy most of the money raised in a small IPO.

Changing the rules is “positive,” said Gary Dvachchak, the head of the Blueshirt Group, who includes the consultation of Chinese companies on the IPO. “I think it will instill more confidence that companies list it for legal reasons, and less likely to play stocks, and it really protects the company.”

Nasdaq noted that Chinese lists are at risk for US investors with the inability to take legal measures “against legal entities and persons involved in potentially manipulative trading activities in these securities.”

“In addition, the Exchange noted that Chinese companies listing NASDAQ due to IPO with the size below $ 25 million have a higher level of requirements,” Nasdaq said.

The US Securities and Exchange Commission must officially approve the NASDAQ proposal. Companies already in the IPO process will have 30 days to complete the process according to the previous rules, Nasdaq said, while all subsequent lists were to match the changes.

The New York Stock Exchange, which usually deals with much more IPO, did not immediately respond to a request for comment on the US working time. The SEC and China regulating commission did not immediately respond.

In fact, the change in the rules of the New York Stock Exchange occurred on the heels of Beijing’s announcement at the end of Wednesday that it will be Wear new punitive tariffs on some optical fiber manufacturersEffective Thursday.

“China says: we are ready to fight fire,” Olson said. “The trading truce is just a temporary group. It can collapse at any time.”

The Ministry of Commerce in China refers to a six -month investigation, which found that some US exporters have overcome anti -dumping levies in China by selling an optical fiber.

New York with headquarters, an optical fiber manufacturer in New York 8 He now faces 37.9% of the product exports to China, Fitel 33.3% and Draka Communications American 78.2%.

According to the total business, corning numbered China as the largest source of revenue outside the United States, made 32% of total sales income in 2024, the company’s profits said.

The company and the US Trade Department did not immediately respond to a comment request.

In China, a $ 57 million deficit with optical fiber fibers in the first seven months of this year, according to the customs customs.

This imbalance may have given Beijing a “technical base”, – said Tianchen SU, senior economist of the Economist Intelligence department, noting that China’s subjects from the United States are largely more advanced and thus more expensive than the subject.

“The exchange of fire (between the US and China) will continue in many ways,” – predicts this, which can disrupt the plans for the meeting between the two countries.

The decision came through the day after Washington recalled Taiwan Semiconductor ManuFacturing Co’s Co Authorization to send key equipment to create chips and technology to a production plant in China, Last step to curb.

The Chinese tariff for optical fibers “signals” dissatisfaction “on the latest US movements to limit Beijing’s access to the advanced chips and participation in the submarine cable supplies, said Alfred Mantasu-Helo, the head of the Greenpoint Advisory Firm.

But the tariff “also” is also aimed and restrained to avoid the destruction of months of trade. And he also serves as a reminder that China’s lever goes beyond the rare land, “Mantafar-Hella said.

Arieriters for IPO with market capitalization below $ 600 million saw their average commission in triple for four years up to 12% in 2020Hong Kong Stock and Local Securities Regulator said in a joint statement in May 2021.

Then, in November 2022, the financial regulation body in the United States warned investors about “about” about “Significant unusual rise in prices a day or shortly after IPO some issuers from small capitalMost of which participate issuers with operations in other countries. “The message mentions, in particular, in China.

Finra added that “my concern” about how foreign nationals opened accounts with American brokers to invest in IPO, and then placed “manipulative orders and bidding to overestimate the market prices.”

In Finra’s podcast of November 12, 2024 Peter Gonzalez with special investigations said Ramp and garbage schemes developed – Weeks or months after the IPO, not just a few days.