The door is closing on Chinese tech IPOs on Wall Street
Tough US laws requiring audits for foreign companies. A growing crackdown by Beijing that threatens to touch every part of the Chinese tech industry. A botched public offering by one of China’s most prominent tech firms.
Things are looking pretty dire for Chinese tech right now, especially firms that have been considering overseas listings as a way to raise money. The chill created by tensions, both within China’s borders and with its greatest rival, could bring overseas investment in Chinese tech to a grinding halt. Investors are already rattled. China’s unprecedented tech crackdown has wiped $1 trillion off the value of overseas-listed Chinese tech stocks since February — one of the worst sell-offs in history, Goldman Sachs analysts said in a research report last week.
And since shares in Didi crashed this month after its IPO in New York — a result of the massive scrutiny the ride-hailing company has faced from Chinese regulators and American lawmakers — a wave of other Chinese firms have reportedly backed off of plans to go public in the United States. TikTok owner Bytedance, social e-commerce platform Xiaohongshu, fitness app Keep and medical data company LinkDoc Technology have all either shelved or scrapped plans to list in New York, according to reports by Bloomberg, the Wall Street Journal and the Financial Times. (ByteDance declined to comment on those reports, while the rest did not respond to requests for comment.)
More recently, Bloomberg reported that on-demand delivery app Lalamove is thinking about shifting plans for a $1 billion US IPO to Hong Kong as Chinese regulators clamp down on overseas listings. The company told CNN Business that it is “paying close attention to capital markets,” but has no specific plan for going public. It “may very well be” the end — at least temporarily — to US listings for Chinese companies, according to Doug Guthrie, a professor and director of China Initiatives at Arizona State University’s Thunderbird School of Global Management. He added that a “serious pause” on such listings could be in effect until US-China relations improve.
