Why Futu And UP Fintech Shares Are Plunging Today
Tencent Holding Ltd (OTC: TCEHY) backed Chinese online broker Futu Holdings Limited (NASDAQ: FUTU) unexpectedly deferred its Hong Kong listing less than a day before its anticipated debut on December 30.
Futu said it was "clarifying certain matters" with the Hong Kong Stock Exchange.
Futu was the latest U.S.-listed Chinese firm to bid to dual list its shares in Hong Kong to reach a broader investor base and hedge against the risks of getting kicked off U.S. exchanges.
Also Read: Pinduoduo And Other US Listed Chinese Tech Companies Abort Dual Listing Options
Futu and its main rival UP Fintech Holding Limited (NASDAQ: TIGR), operated in a gray area for their mainland China businesses, Bloomberg reports.
The companies enabled millions of local investors to evade capital controls to trade shares in markets such as Hong Kong and New York.
A senior central bank official has questioned the legitimacy of online trading firms, calling their services "illegal" at least twice since last 2021.
The last-minute delay "raises red flags" and "could be of concern to investors and tarnish its profile among retail clients in its largest market," Bloomberg Intelligence analyst Sharnie Wong wrote.
Tencent is Futu's second biggest shareholder after billionaire founder Leaf Li.
Price Actions: FUTU shares traded lower by 27% at $42.95 on the last check Friday. TIGR shares traded lower by 29% at $3.37.
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