Dubious Chinese Companies In America (ZSTN, RINO, CVVT, LIWA)
Congress and the SEC aren't happy with Chinese reverse listings on American exchanges. Many companies, like RINO International (NASDAQ: RINO), have tiny revenue numbers, creative accounting practices, and poor management practices. Other stocks in the Chinese reverse takeover market that will be affected by this government crackdown will include China Valves Technology (NASDAQ: CVVT), Origin Agritech (NASDAQ: SEEED), ZST Digital Networks (NASDAQ: ZSTN), and Lihua International (NASDAQ: LIWA).
The Wall Street Journal reported earlier that Congress and the SEC will be launching a large investigation into Chinese listings on American exchanges. Most of these companies have market capitalizations under $500 million.
Moreover, these investigations could cause serious disruptions to stock prices of these companies. RINO and China Education Alliance (NYSE: CEU), for example, have recently dropped over 50% in the past few weeks after government investigations into their reporting practices. RINO was also downgraded from the NASDAQ exchange to the pinksheets exchange.
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