Chinese stocks have been selling off in the U.S. and Hong Kong stock markets recently. Pictured is the New York Stock Exchange.
Shares of U.S.-listed mainland company and bitcoin miner Yibang International plunged nearly 20 percent intraday on April 6 after the company was accused by Hindenburg Research, a leading short-selling firm, of illegally using funds raised from U.S. investors.
According to Tencent Securities 6, Yibang International shares fell 18.7% to $5.17 on 6, after once hitting a low of $4.95, a drop of more than 20%.
Analysts at Hindenburg Research, which says it holds a short position in YB International, said YB International has invested $103 million – most of it raised in an IPO (initial public offering) deal in June 2020 – in “bonds related to Hong Kong underwriter AMTD International. (AMTD International), the Hong Kong-based underwriter, and $21 million to repay a related-party loan to a relative of YB International’s chairman and chief executive officer, Hu Dong.
Hindenburg said Ebonex, the cryptocurrency exchange recently launched by Ebonex, reported what appeared to be “fictitious trading volume,” making it one of the largest spot exchanges in the world, “despite having no online presence.”
Hindenburg said, “The company will likely continue to sell shares as long as investors are willing to continue to buy. We think it’s pretty clear that this is a one-way street and that capital is not coming back.”
The recent general decline in the share prices of Chinese stocks has sparked great concern in the industry.
According to an April 5 report by Wildfire Finance, as of April 1, the share price of another Chinese stock, “Who’s Who”, has suffered a rare and embarrassing 11 consecutive losses in its history, with its share price falling from $149 to $32 and its market value falling from $38 billion to $8.2 billion, evaporating nearly $30 billion, which translates to about The market value fell from $38 billion to $8.2 billion, evaporating nearly $30 billion, or about $19.6 billion.
Recently, because the U.S. regulators issued a requirement for foreign companies led by Chinese stocks to comply with the U.S. auditors’ policy, companies that do not meet the requirement will be removed from the U.S. stock market. Once the policy came out, Chinese stocks plunged, which was further pushed down by international institutions selling off Chinese stocks. At the same time, Chinese stocks have also been accused by U.S. investment institutions of repeated financial fraud because they are not bound by U.S. auditors.
The company was founded in 2010 by Hu Dong, chairman of the board and chief executive officer, and has been developing mining equipment since 2014 and launched its own brand of miners, Wingbit, in 2016.
Yibang International had planned to list on the main board of the Hong Kong Stock Exchange twice in June and December 2018, which ultimately ended in failure.
It was listed on the NASDAQ in November 2019. In April 2020, Yibang International publicly filed an IPO prospectus with the SEC and was listed on the NASDAQ on June 26 of the same year at an offering price of $5.23.
On the first day of listing, Yibang International fell below the issue price. Its price went all the way down after the opening, plunging 27% during the day to a low of $3.81. The final closing price was $5, down 4.4%.
Recent Comments