Breaking News! China Bans U.S. IPOs [Delisting Existing Companies?] - China reportedly weighs ban on U.S. IPOs from domestic tech companies. The VIE structure seems to be ending with a bang...
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Hey this is tom, and we have some breaking news out of china. The chinese government just dropped a massive bombshell. According to this wall street journal article china plans to ban us ipos for data heavy tech firms. You heard that correct.
This is not clickbait. This is not made up. This is from the wall street journal and it's been confirmed across multiple media sources. The chinese government plans to cancel ban us ipos for any chinese tech company.
Let me read you a piece of this article and i'll. Tell you what i think about it check this out. This is crazy. China plans to propose new rules that would ban companies with large amounts of sensitive consumer data from going public in the us.
In recent weeks, officials from china's stock regulator have told some companies and international investors that the new rules will prohibit internet firms holding a swath of user related data from listing abroad. The people said the regulators said that the rules target companies seeking foreign initial public offerings via units incorporated outside the country, so in other words, this is literally the vie structure that i was preaching about for many months, and nobody listened to me so before we go Through this analysis, let me explain what the hell is going on here, but first don't click, nothing, don't smash, nothing don't buy nothing. I have no courses to sell no sponsorships. I don't know nothing to nobody.
I can say whatever the hell i want and i'm about to go medieval on china. This is going to go crazy. So, first of all, as i mentioned before, i was on record multiple times saying: the china risk is too big and people are lining up to say well tom they're never going to ban us ipos. Why would they block their own access to foreign capital like that? That don't make no sense, and i kept telling you it has nothing to do with common sense or logic or business logic that has everything to do with control.
These guys want control and the only way they're going to get it is by tempering, hampering and slowing down these companies. From going outside of china, i told you and for those who are about to go in my comment, section blasting me with explanations of how this will only apply to companies with sensitive user data. This is literally every chinese companies you care about. This is alibaba.
This is every technological company out of china. The only thing they could list now, based on these new rules in the us are dentists. I mean what the hell you thought i was kidding. I told you this is going to happen so essentially, this decision is very important because it sets an important precedent.
This is the chinese government coming out and saying. Well, we've been asleep at the wheel for 20 years, we're now coming out and saying we do not accept the vie cayman island structure. It is not acceptable, at least for technological companies, which is literally the only companies we care about out of china. I mean i don't want to invest in a grocery store in china. Come on so they're coming out now and saying for the first time: hey vies are not legitimate. We're not gon na accept it and that's a huge deal because all of you kept saying to me well tom they're, never gon na. Do it that's like shooting themselves in the foot. Why would they do it control? I told you they don't even stop to breathe.
I mean every day you have a single new piece of information coming out of them going berserk. They don't even try to pretend, as if this is not happening. Imagine how brazen that is that they just can literally do it and not give a i mean. Would you want to invest in the country like this? I don't it's just too risky but hold on.
I got more because the real question here is what's going to happen with the companies that are already listed in the us. Will those companies be exempt from this new legislation? Will they be just left alone, because this is due process and you can't apply retroactive rules to existing companies? This is china, mother lover, of course, they're gon na get hit. China isn't about to say. Well, you know the company's already has a ton of user information like alibaba we're just gon na.
Let it go, i mean it's already listed, come on just leave them alone. Do you really think this is how things work in china? I mean you must be high if you believe that china isn't going to leave existing companies out of this, there's not going to be any exemptions, basically leaving them out of the scope of these rules. They'll have to comply, which means we're probably looking at the potential. The listing of every chinese company you care about technological internet.
Any companies that actually are worth coming out of china are in real risk of the listing, and this time this isn't some kakamemi fake. The listing threat. You know, like the u.s, threatened the chinese companies. Well, if you don't comply with our accounting processes well, in three years, we probably will consider - probably maybe banning you from the u.s ipos.
This is a real thing. This isn't they're coming out and saying well vi is not acceptable. That means you're going to very quickly see applications with regards to existing companies and trust me that thing is going to be painful for a lot of people, and i know a lot of you will be asking me well tom. What should we do and, of course, i'm not a financial advisor, i'm just a guy with an opinion, you have to do it in research.
This is just my opinion. It might be an accurate might be wrong, might be the remedies of a madman. I can't tell you what to do, but if it was me, i honestly don't know what i would have done, because this is a complicated situation. Do you stay and you wait for the share price to go up a little bit after this initial spike and then the crash, or do you leave now and cut your losses? I honestly don't know, but i'm really happy that i'm not faced with this decision, because you know if you want to lose weight, you're, probably not going to be hanging out near pizza shops with a lot of money in your pocket and when you're hungry. That's not a good place to been it's the same thing with these chinese companies. Why would you put yourself in this bad situation? I honestly don't know. What's the solution here, i just know that the situation is really bad and for those of you who scream well foster tom is just spreading father, but chinese companies. Oh look: alibaba, i'm buying the dip well for those people, i'm just gon na say, go to town enjoy yourself.
I hope this works out for you. But honestly, i don't think that's probable. I think it might happen, but it's probably not gon na happen quite simple. I mean i might dunk one day, basketball playing the nba, but it's very unlikely.
This is the same situation very unlikely, but you know go try have fun. Why not?.
fantastic video!, thank you for this information. Huge help in choosing what to do regarding alibaba stocks! cheers!
If you do a google search there’s news that China is asking both state owned and private firms to migrate data to government-run cloud services. That’s breaking news for me and literally killing their cloud industry
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Hey Tom, Fun Fact : Luckin Coffee…possibly the worst Chinese de-listing case in recent history is up over 1100% from its delisting low of .95c. In the unlikely event a Chinese stock is delisted it still trades "over the counter" If any of my Chinese stocks get delisted history shows that is the time to go all in. Especially ones with a dual listing. Long XPEV
Tom, you are talking about, companies like NIO, XPEV, BABA, JD, and the list is crazy long. This will kill the market, bankrupt the companies and I don't know, this is pure insane
Tom is wrong on this once again. He does not have the proper facts and he should check his facts before he opens his big mouth .
Is this surprising at all to anyone? If regulation or prevention of cryptocurrency is the goal, they will have to ban everything. There is absolutely no hope that they can succeed: ZERO. In all history, blocking something like this fails. It is just a matter of time. Cuba is the closest example to regulation to death and look how that turned out. China has no other choice but to ban. They will ban everything. All commerce. I dumped all China related stocks in January. Good riddance.
I won tens of thousanda from china stocks but lost half due to current situation. I never sell at loss (would be over 40% in BABA and KC i hold) but it's a two way attack on them: from CCP afraid of losing its grip and US government not too keen in advancing Chinese economy😔
Managed to sell NIO, XPEV, BILI with zero loss but these two remaining look like money about to evaporate soon😭😭😭
Yes, Tom, I remember your advices, but greedy me thought I'll hit the jackpot again
China was much scarier when everyone thought they were good for the world. This is great news for Anti China Americans. They want to lose their foreign capital. I mean, it's a dream come true
Oh well. "Belt and Road" vs " Built Back Better". East.vs West. US led globalization no more.
China CCP is behaving like a thug. Oh, forgot they are one. Greedy CCP makes all the rules and changes rules to serve themselves.
As someone who day and swing trades NIO regularly, I have to say I wouldn't mind if the turbulence gets worse. There's more money to be made shorting NIO and other Chinese stocks than going long. Bring it on, comrades!
Many people here put the "American Standard" on foreign countries' behavior. You bring the broader perspective Tom. Good good!
Well i prefer to go with charlie munger, mohnish pabrai, Guy spier and many other respectable investors instead of a joker spreading fear, i hope you wont delete this video in a couple of years when baba hit all time high
I just bought a crap ton of alibaba because I saw their financial statement and they make money hand over fist. Based on these facts. I bought a crap ton.
US been uncontrol printing of US$ without any support ………. the main support is that the whole world money coming to US to buy stocks using US$…… look like the china want to do the same thing, moving Good china Chinese stocks to HK, to buy it you got to use HK$, which is control by CHINA & inter related to YUAN < china $ >. logically will be acceptable as Chinese yuan is supported by Chinese economy – which got products to support it…. < Value of $$ == economy of productivity / services providing > As US $ is == to US military power . Today world as we know is US is not going to WAR as it cost US too much & also their people will not accept WAR SOoooooo…….. $$$ talk or $$$ politic
This seems short sighted and your analogy between China and Russia are wrong. You can see the pattern China is doing such as Facebook vs. WeChat, TikTok vs, instagram, baba vs Amazon. TSLA vs NIO xpeng, google vs baidu.. name a country that is not cornered by American ingenuity. China seems self reliant in its tech bubble
I have been laughing at people buying Chinese stocks all year. If you are going to support their horse crap I’m going to giggle at your losses.
I used to like Tom Nash, but now he is just like a mouth piece for certain mainstream financial media spreading FUD. When is Tom all of the sudden a China Expert? Just because he is from Russia doesn’t mean he know exactly what’s going on in China? Has he ever visited and lived in China before? I don’t think so. 🤦♀️
Tom as usual your doing your pro American act again…the Chinese do not want the same problems USA have..too many stupid people believe crap on YouTube..twitter face book Google etc..chinese don,t want their people brainwashed by outside forces…anyway Tom ..just keep up the fear mongering..and a lot us will keep buying..Yu add nothing new to the Chinese story..Old man really old
.too
Am wondering who is going to want to buy much from China if China gets really nuts with using its Military. At this point think India has them over matched. Chinese reverse engineered planes are under powered. Chinese shipping trawlers are being shot up and some sunk. If the Steel provided for their weapons is as bad as what they are providing for their buildings OMG an RPG might really be able to take them off the battle field.
Anyone who considers as a foreign investor in China at this point seem to be totally out of their mind. Those who have invested their good luck trying to get any $$$ out of the country. Factories are build on shifting sand and made of paper mache. Tofu buildings with steel that is so very weak that is can barely support its own weight much less a building. Real estate long 25% of the economy is collapsing along with many flood ravaged buildings. 20% of the college grads cannot find work. Many employable people are laying flat. The high dollar companies are being beaten up by the CCP. The CCP is pushing to get heavy industry as the prime mover but as mentioned The steel industry is producing crap steel and is down 30% in real production. This is not helping with the 20% unemployment rates. Add to this ever increasing need to import food due to various destruction of farm land and associated animal stock. The Cvid virus is having a massive effect also ( who wants to do business with a country who is actually practicing bio warfare on the world. Then there is a huge problem with shipping containers and the soaring costs of shipping, literally going from $3000 for a 20 ft container to some over $30,000 for the same container just for the shipping. Wow as I said between the CCP crack down and the real world happing and the Karma China is in big trouble and anyone investing has to be crazy. Dont forget the massive amount Japan is providing to get companies to move out of China and back to Japan.
It was kinda obvious that nothing good would come out of China. Its just the way they roll and why should their stock market be any different
So buy long term calls (Incase they stick around) and short term puts (in case we get delisting news) and make bank either way? Okay great!