Chinese companies’ fundraising on Wall Street fell by more than half this year, with many companies forced to cut their valuations and lean on existing investors to get their initial public offerings across the finish line, reported the Financial Times.
While the number of new Chinese listings on Nasdaq and the New York Stock Exchange fell to 25 companies from 33 last year, the amount of capital raised in the deals plummeted to $3.4 billion from $9.2 billion in 2018, according to Dealogic data.
Bankers and lawyers say
many companies had to cut their valuations and bring in demand for shares from
existing shareholders or associates in what are referred to as “friends and
family” deals, deepening a trend that started last year.
Only 13 of the 58 Chinese companies that have listed in New York in the past two years are trading above their IPO price, with the shares of all these companies down an average 29% from their pricing, according to Dealogic.