Nasdaq increases scrutiny of small-cap IPOs after big swings
BNN Bloomberg
Nasdaq is stepping up scrutiny of initial public offerings by small-cap companies, according to people familiar with the matter, after a series of outsized gains by new listings that quickly evaporated.
The exchange is looking more closely at prospective small-cap issuers across industries and countries, said the people, who asked not to be identified as the information is private. Some companies have put their IPO plans on hold as a result, the people said.
The Nasdaq’s markets “are and will continue to be open,” the exchange said in response to a Bloomberg News query, adding that it carefully reviews companies that intend to list. Nasdaq declined to comment on any specific measures.
The recent spate of wild market debuts, mainly by issuers based in China and Hong Kong, has caught attention across markets. In one of the most striking examples, last month, little known Hong Kong financial services firm AMTD Digital Inc. soared more than 32,000 per cent to briefly surpass Goldman Sachs Group Inc. by market value, before tumbling 97 per cent from its August peak. The shares are still 785 per cent higher since its New York Stock Exchange IPO in July. Addentax Group Corp. and Magic Empire Global Ltd. are also among firms that have experienced massive share moves on trading debuts.
