Revisiting the viability to allow dual-class share structure companies to list in the financial market of Hong Kong

2018 ◽  
Vol 47 (3) ◽  
pp. 167-195 ◽  
Author(s):  
John Kong Shan Ho
Keyword(s):  
New York ◽  
Hong Kong ◽  
Initial Public Offering ◽  
Financial Market ◽  
Stock Exchange ◽  
The One ◽  
Public Offering ◽  
The Right ◽  
Dual Class ◽  
Share Structure

The request of Alibaba, China’s largest e-commerce company, to allow a self-selected group of its past and present management known as the ‘partners’ the right to nominate a majority of the directors in its negotiation with the Hong Kong Stock Exchange (HKEx) for an initial public offering (IPO) in 2013 reignited a new round of debate over the one share, one vote policy, which has survived for three decades in Hong Kong. Alibaba’s IPO application to list on the HKEx was eventually rejected which ultimately led to the company’s decision to list on the New York Stock Exchange. In late 2017, the debate on whether companies with dual-class share (DCS) structure should be allowed to list in Hong Kong re-emerged as the HKEx has announced that it would amend its listing rules to enable companies with DCS structure to list on its exchange, subject to certain safeguards and restrictions. This article examines what measures Hong Kong could adopt to allow companies with DCS structure to list on its exchange despite legal and institutional shortcomings of its financial market. In doing so, it will also make reference to other major financial markets in the world and examine how other jurisdictions have handled the issue of DCS structure companies.

Alibaba Group Initial Public Offering: A Case Study of Financial Reporting Issues

2016 ◽  
Vol 31 (4) ◽  
pp. 449-460 ◽  
Author(s):  
Qing L. Burke ◽  
Tim V. Eaton
Keyword(s):  
New York ◽  
Initial Public Offering ◽  
Financial Reporting ◽  
Stock Exchange ◽  
Financial Accounting ◽  
Learning Needs ◽  
York Stock Exchange ◽  
Accounting Courses ◽  
Chinese Company ◽  
Public Offering

ABSTRACT In September 2014, the Chinese e-commerce giant Alibaba Group Holding Limited issued shares on the New York Stock Exchange, making it the world's largest initial public offering. This case examines different aspects of the Alibaba Group's initial public offering, including Alibaba Group's business model, financial reporting and corporate governance, as well as the macroeconomic, political, and legal environment in which the company operates. In addition, this case will familiarize students with the risks and opportunities for Chinese companies and investors when a Chinese company lists in the U.S. This case is suitable for financial accounting and international accounting courses at the intermediate and advanced levels for undergraduates as well as graduate students. The case is scalable, and instructors can choose from multiple sections of the case and different case questions to tailor the case difficulty to their students' learning needs.

Part I General Aspects, 2 The IPO Process, IPO Disclosure, and the Prospectus Regulation

2020 ◽  
Author(s):  
Teerink Han
Keyword(s):  
Initial Public Offering ◽  
The Other ◽  
Business Information ◽  
Other Hand ◽  
The One ◽  
General Aspects ◽  
Public Offering ◽  
The Right ◽  
Insight Into

This chapter offers insight into a typical initial public offering (IPO) process, highlighting key practical and legal considerations around disclosure, through the IPO prospectus and otherwise. The prospectus plays a key role in the preparations for, and execution of, an IPO. As an IPO prospectus typically constitutes a company's first public dissemination of financial and business information, the company and other parties involved in the IPO process must carefully consider the right balance between, on the one hand, drafting the IPO prospectus as a marketing document introducing the company and its business to potential investors, whilst, on the other hand, being able to use the prospectus as a disclosure document that protects the company against liability arising from claims from investors or others after the IPO. Here, the chapter summarizes the different phases in an IPO process and the most important documents and parties involved, focusing on the central role of the IPO prospectus. In addition, a number of changes resulting from the enactment of the Prospectus Regulation are likely to be of particular relevance to IPO processes. The expected impact of these changes is therefore also discussed.

Beijing's Alibaba move signals shift on IPR

2015 ◽  
Keyword(s):  
New York ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Share Price ◽  
Online Retail ◽  
Content Type ◽  
Counterfeit Goods ◽  
York Stock Exchange ◽  
The Government ◽  
Public Offering

Subject Alibaba's involvement in trade in counterfeit goods, and the authorities' response. Significance At nearly 300 billion dollars in annual sales, China has the largest online retail market in the world. Some 80% of it is handled by the Alibaba Group. In September 2014, Alibaba launched on the New York Stock Exchange (NYSE), raising 25 billion dollars in what became the world's largest ever initial public offering (IPO). Four months later, Chinese regulators went public with allegations implicating Alibaba in the sale of vast quantities of counterfeit goods, sending its share price falling and bringing one of China's most prominent private firms into public confrontation with the government. Impacts The government and Alibaba will seek a mutually face-saving exit from their confrontation. The government will want to avoid critically undermining Alibaba, whose operations provide jobs for millions of people. The transition to a consumption- and innovation-led economy will require ever-greater protection of IPR. Retailers and wholesalers will need to review their business to minimise possible involvement with counterfeit or sub-standard products.

Didi debacle shines light on China's new normal

2021 ◽  
Keyword(s):  
New York ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
The United States ◽  
New York Stock Exchange ◽  
New Normal ◽  
Content Type ◽  
York Stock Exchange ◽  
Regulatory Scrutiny ◽  
Public Offering

Significance China’s ride-hailing major Didi was targeted by the Cyberspace Administration of China (CAC) ahead of its initial public offering (IPO) on June 30. It is complying with the ongoing cybersecurity review mandated by Beijing and is battling rumours about plans to delist from the New York Stock Exchange and go private. Impacts Current investors in Chinese tech stocks need to consider this situation as a new normal, not a departure from trend. The VIE structure will likely come under greater regulatory scrutiny, but is unlikely to be dissolved. Didi may yet delist in the United States.

scholarly journals Determinants of Reluctance to Initial Public Offering in Cameroonian Financial Market

2021 ◽  
Vol 10 (4) ◽  
pp. 115-126
Author(s):  
Simplice Gaël Tonmo ◽  
Melissa Grace Tchapda Woumkep ◽  
Ghislain Tchoffo ◽  
Glwadys Pinta Mefenza
Keyword(s):  
Stock Market ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Pearson Correlation ◽  
The Family ◽  
Pearson Correlation Test ◽  
Financial Characteristics ◽  
The One ◽  
Public Offering ◽  
The City

The main objective of this study was to identify the specific characteristics of companies in Cameroon and to highlight the factors that explain their reluctance to be listed on the stock market. Thus, in order to build the state of the art appropriate to this objective, we had to follow three lines of investigation: the theories related to the listing of firms on the stock market, their specific characteristics, and the cross-fertilization of these two fields. On the basis of the literature, four explanatory hypotheses were deduced: they are related to the shareholding structure of firms, to the financial characteristics, to the size of the firm and to the socio-demographic characteristics of the managers. To test these hypotheses, a survey was conducted among 40 SAs in the city of Douala. The data was processed with the SPSS 20 software and we used flat sorting, cross-sorting, pearson correlation test as well as linear regression. This methodology allowed us to obtain the results according to which the family and filial character and the size of the company are mainly the factors of reluctance of the listing on the stock exchange on the one hand, and the behavioral factors of the company managers, in particular the level of education and the experience on the other hand.

At-Tahur’s IPO: Creating Pakistan’s First Public Company in Pasteurized Dairy Segment

2021 ◽  
pp. 097282012110396
Author(s):  
Sana Tauseef
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
Discounted Cash Flow ◽  
Ipo Underpricing ◽  
Strike Price ◽  
Flow Models ◽  
Public Company ◽  
One Year ◽  
The One ◽  
Public Offering

This case examines the initial public offering (IPO) decision made by At-Tahur Limited during 2017. The outstanding performance of the equity market led the company to decide in favour of stock issuance to finance its required expansion. However, soon after the company started its IPO process till the month when the shares were floated in the market, Pakistan Stock Exchange experienced its worst decline since the financial crisis, with the index dropping by 17% over the one year from July 2017 to July 2018. The IPO was oversubscribed, and the company was able to sell its shares at PKR 21 per share, higher than the floor price of PKR 20. The strong demand for the company’s shares and a successfully completed stock offering transaction during one of the most difficult periods in capital market history left the IPO management team confused about whether PKR 21 was an appropriate price for the company’s share and if it was the correct time for the company to go public. The case provides an opportunity to discuss the valuation of unseasoned equity using market multiples and discounted cash flow models. Students are invited to value At-Tahur’s stock in light of the company’s planned expansion and take a position on whether the IPO strike price of PKR 21 was correct. The case also allows for a discussion of IPO trends, costs and benefits of going public and the IPO underpricing phenomenon.

scholarly journals Examining the Existence of Long-run Initial Public Offering (IPO) Underperformance at Three Different Stock Exchange Markets in Japan

2016 ◽  
Vol 7 (2) ◽  
pp. 190
Author(s):  
Yoshiki Shimizu ◽  
Hideki Takei
Keyword(s):  
Market Efficiency ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Sampling Period ◽  
Efficient Market Hypothesis ◽  
Japanese Market ◽  
Long Run ◽  
The One ◽  
Public Offering

This study conducted the examination of the long-run performance of IPO stocks in the Japanese market by measuring the monthly AAR/CAAR of sample IPO stocks. The study did this, so as to investigate whether IPO stocks in the Japanese market outperform in the long-run, as prior research on this phenomenon in the US market (Ritter, 1991; McDonald and Fisher, 1972) had found. The finding is that on the one hand, at TOPIX and TSE-2ND, stocks IPO firms that went public during 2004 to 2011 did not underperform the market in the long-run, as the monthly CAAR of sample IPO stocks on month 36 was not statistically significant. On the other hand, the finding also reveals that at MOTHERS, IPO firms underperformed the market throughout the period between months 2 and 36, and the monthly CAAR of IPO stocks at this market was –30.08 percent on month 36. The implication of this finding for the Efficient Market Hypothesis is that market efficiency held well at TOPIX and TSE-2ND; where during the sampling period abnormal returns could not be achieved and thus the long-run IPO underperformance was unlikely to occur. On the contrary, the departure from market efficiency was observed at MOTHERS: In the long-run, IPO stocks kept experiencing negative abnormal returns, and the existence of the long-run IPO underperformance was found to be significant.  Long-run IPO underperformance did not exist, with only one exception: It is only at MOTHERS that the long-run IPO underperformance was observed, whereas at TOPIX and TSE-2ND the phenomenon was not observed. 

Initial Public Offerings in Hong Kong

2018 ◽  
pp. 620-651
Author(s):  
Queenie Lai
Keyword(s):  
Hong Kong ◽  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Equity Capital ◽  
Regulatory Structure ◽  
Chinese Market ◽  
Application Process ◽  
Mainland Chinese ◽  
Public Offering

The Hong Kong Stock Exchange (HKEx) is one of the world’s leading exchanges for international capital raising. This chapter begins with an introduction to the historical trends and regulatory structure of Hong Kong equity capital markets. It discusses how the HKEx provides a platform for Mainland Chinese companies to seek an international listing and for international companies to gain exposure in the Mainland Chinese market. The chapter follows with a practical overview of the initial public offering (IPO) process in Hong Kong: from pre-IPO considerations to a listed company’s post-listing continuing obligations. Topics will be examined from a legal and regulatory perspective and include Main Board and GEM Board listing qualifications, listing methods, application process, role of sponsors, prospectus requirements, offering structure, post-listing continuing obligations, notifiable and connected transactions, corporate governance, and future directions of the HKEx.

SEC approves Nasdaq rule change to permit direct listings without an IPO

2019 ◽  
Vol 20 (3) ◽  
pp. 25-27
Author(s):  
Helene R. Banks ◽  
Bradley J. Bondi ◽  
Charles A. Gilman ◽  
Elai Katz ◽  
Geoffrey E. Liebmann ◽  
...  
Keyword(s):  
New York ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Securities And Exchange Commission ◽  
Securities Litigation ◽  
Content Type ◽  
Rule Change ◽  
Rule Changes ◽  
Expert Analysis ◽  
Public Offering

Purpose To explain the rule changes in Nasdaq’s new Listing Rule IM-5315-1, approved by the US Securities and Exchange Commission (SEC) on February 15, 2019, that permit direct listings on Nasdaq without an initial public offering, similar to the New York Stock Exchange (NYSE) rule changes approved in 2018. Design/methodology/approach Explains the legislative and regulatory background, historic limitations on direct Nasdaq listings, and de-tailed provisions of Nasdaq’s new Listing Rule IM-5315-1. Findings The direct listing alternative to an IPO may appeal to cash-rich companies that do not need the publicity or new capital associated with a traditional IPO. Originality/value Expert analysis from experienced securities litigation and corporate governance lawyers.

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